15 MINUTES of FINANCE AND CORPORATE

Transcription

MINUTES of
FINANCE AND CORPORATE SERVICES COMMITTEE
10 MARCH 2015
PRESENT
892.
Chairman
Councillor D M Sismey
Vice-Chairman
Councillor A S Fluker
Councillors
J P F Archer, F A Delderfield, P G L Elliott, B E Harker,
M R Pearlman and Rev. A E J Shrimpton
Substitute Members
Councillor R G Boyce CC
APOLOGIES FOR ABSENCE
There were none.
893.
MINUTES – 27 JANUARY 2015
RESOLVED that the Minutes of the meeting of the Committee held on 27 January
2015 be approved and confirmed.
894.
DISCLOSURES OF INTEREST
Councillor D M Sismey disclosed a pecuniary interest in Agenda 12 Treasury
Management Performance and Agenda Item 15 Treasury Management and Annual
Investment Strategy 2015 / 16 as he was a Managing Director of Goldman Sachs.
895.
PUBLIC PARTICIPATION
There was none.
896.
PAY POLICY STATEMENT
The Committee considered the report of the Director of Resources seeking adoption
of the Pay Policy Statement (attached as Appendix 1) for the financial year 2015 / 16.
Members were reminded of the requirements of the Localism Act 2011 for the
Council to publish a Pay Policy Statement (the Statement) describing the authority’s
approach to remuneration of highest and lowest paid staff. This Statement has to be
reviewed annually and the 2014 / 15 version had been amended to reflect changes
15
following the Senior Management Restructure. It was noted that there were no
substantive changes to the Statement.
RECOMMENDED that the Pay Policy Statement attached as APPENDIX 1 to these
Minutes be adopted for the financial year 2015 / 16.
897.
STRATEGIC PLAN FOR PEOPLE AND WORKFORCE DEVELOPMENT
2015 - 19
The Committee considered the report of the Director of Resources seeking Members
consideration of the draft Strategic Plan for People and Workforce Development 2015
– 2019 (the Plan), attached as Appendix 1.
The Strategic People, Performance and Policy Manager outlined the purpose of the
Plan was to provide staff with the necessary skills, behaviours and competencies to
deliver the Council’s priorities. The Plan was a four year plan which would be
reviewed annually. The report highlighted the challenges in respect of both
workforce and people which the Plan sought to address along with the planned
continuous improvement processes throughout the duration of the Plan.
RECOMMENDED that the draft Strategic Plan for People and Workforce
Development 2015 – 19, attached as APPENDIX 2 to these Minutes, be approved
and adopted.
898.
PROMENADE PARK, MALDON – ARRANGEMENTS FOR MALDON MUD
RACE 2015
The Committee considered the report of the Director of Customers and Community
asking Members to consider options for the control of parking on Promenade Park,
Maldon during the Maldon Mud Race 2015.
It was noted that the 2015 Maldon Mud Race would take place on 26 April 2015 in
the Promenade Park. The Mud Race would be run by Maldon Mud Race Ltd and the
report set out the arrangements agreed for the 2014 event regarding donations from
car park income. A copy of the Maldon Mud Race Annual accounts were attached as
Appendix 1 to the report.
The Committee was advised that activities associated with the Mud Race may begin
from as early as 10am on the day of the event, although the actual race would not start
until 12:45pm. Officers were therefore suggesting that a donation to the Maldon Mud
Race, on the basis of a 50:50 split, be made from car parking income between 10am
and 2pm be agreed.
It was noted that the Community Services Committee had considered this report at its
meeting on 24 February 2015 and agreed that for the duration of the Maldon Mud
Race 2015 control of the vehicular access to Promenade Park, Maldon be given to the
Maldon Mud Race Ltd.
16
RESOLVED that car parking income received on the day of the Maldon Mud Race
2015 between the times of 10:00am and 2:00pm be shared on a 50:50 basis with the
Maldon Mud Race Ltd.
899.
ICT STRATEGY 2015 TO 2019
The Committee considered the report of the Director of Resources seeking Members’
consideration of the Information and Communications Technology (ICT) Strategy
2015 – 19 (the Strategy), attached as Appendix 1 to the report.
The Strategy proposed a four year holistic approach to modernising the Council’s
technological architecture in order to facilitate the use of modern, more effective
service delivery methods. The Strategy had been split into two parts and the report set
out the principles related to each part.
RECOMMENDED that the (draft) Maldon District Council ICT Strategy 2015 – 19,
attached as APPENDIX 3 to these Minutes, be adopted.
900.
SENIOR MANAGEMENT RESTRUCTURE
The Committee received the report of the Chief Executive updating Members on
changes to the staff establishment and financial savings arising from the Senior
Management Restructure (SMR).
A summary of the changes to the staffing establishment arising from the SMR were
set out in Appendix 1 to the report. Members noted the financial savings set out in the
report. In response to a question, the Director of Resources highlighted the ongoing
savings for the Council. The Leader of the Council also commented on the savings
and made reference to the very effective senior management team and managers
employed by the Council as a result of the process.
RESOLVED that the contents of this report be noted.
901.
BUDGETARY CONTROL: 1 APRIL 2014 – 31 JANUARY 2015
The Committee received the report of the Director of Resources providing Members
with key financial information on the progress to date against the approved budget.
The report detailed the variance analysis for the following areas:
•
Revenue Summary (as shown in Appendices 1, 1a and 1b to the report);
•
Major Sources of Income;
•
Salaries (as shown in Appendix 2 to the report);
•
Capital Projects (as shown in Appendix 3 to the report);
It was noted that salary forecasts demonstrated an overall underspend, which was
largely attributable to various vacancies within the Council, projections exceeded the
vacancy saving built into the 2014 / 15 budget.
17
Members were advised that a number of the large projects within the Capital
Programme 2014 / 15 had slipped and would run over into 2015 / 16 with budget
being committed at year end accordingly.
It was noted that closer review of underspends and budget needs would be undertaken
to identify any trends which could be put forward as future savings.
RESOLVED that this report be noted.
Following his earlier declaration Councillor D M Sismey left the meeting at this point.
IN THE CHAIR : COUNCILLOR A S FLUKER
902.
TREASURY MANAGEMENT PERFORMANCE
The Committee received the report of the Director of Resources reporting on the
Council’s investment activity for the third quarter of 2014 / 15 in accordance with the
Treasury Management Policies and Practices (TMPs).
The investment position for the third quarter was set out in Appendix A to the report
which detailed the various investments held in the period, together with the current
position. It was reported that the annualised rate of return for the period was 0.58%
which was above the benchmark of 0.43%, giving an out performance of 0.15%.
The revised Investment Interest estimate for the year was £87,000 which was
projected to be achieved.
The report provided an update on counterparty limits, reporting that the Council’s
advisors were comfortable with investments being made with compliant
counterparties for longer periods. The report noted that during the quarter there had
some changes to the credit rating of counterparties currently used.
Members noted that all other Treasury Management activities undertaken in the third
quarter had been carried out in accordance with the approved TMPs.
RESOLVED that the report be noted.
The Committee agreed to consider Agenda Item 15 – Treasury Management and Annual
Investment Strategy 2015 / 16 next.
903.
TREASURY MANAGEMENT AND ANNUAL INVESTMENT STRATEGY
The Committee considered the report of the Director of Resources seeking Members
consideration and approval of the Council’s Treasury Management and Annual
Investment Strategy for 2015 / 16 (attached as Appendix 1 to the report). Supporting
Treasury Management Practices were attached as Appendix 2 to the report.
It was noted that there had been amendments to the counterparty list in relation to the
maximum durations of investments and to the monetary limits. Members were
18
advised that although the Council did not have any current requirement for borrowing,
setting out the parameters in relation to borrowing was good practice should the need
or opportunity arise within the year.
The Treasury Management and Annual Investment Strategy had been updated in line
with the statutory requirements and good practice, having regard to the Council’s
financial position, links to its wider strategies, plans and aims and the advice of the
Council’s Treasury Advisor.
In response to a question regarding alternative investment solutions for the future, the
Director of Resources advised that this was something that she would be working on
and reporting back to a future meeting of the Committee.
RECOMMENDED
(i)
that the Treasury Management and Annual Investment Strategy together with
the embedded Prudential Indicators for 2014 / 15, as set out in APPENDIX 4
to these Minutes, be approved;
(ii)
that training in relation to Treasury Management forms part of the Member
Development Programme following the May 2015 elections.
Councillor Sismey returned to the chamber at this point.
IN THE CHAIR : COUNCILLOR D M SISMEY
904.
FINAL COUNCIL TAX SETTING 2015 / 16
The Committee considered the report of the Director of Resources on the
setting of the Council Tax for 2015 / 16.
Members were reminded that Section 30 of the Local Government Finance
Act 1992 required the Council to set amounts of Council Tax for each
category of dwelling before 11 March in the preceding financial year. The
report set out the basic amounts of Council Tax approved by the various
authorities as follows:
•
Essex County Council had approved its basic amount of tax for 2015 / 16 on
10 February 2015, which amounted to £1,086.75 at Band D.
•
The Police and Crime Commissioner for Essex had approved its basic amount
of tax for 2015 / 16 on 29 January 2015, which amounted to £147.15 at Band
D.
•
Essex Fire Authority had approved its basic amount of tax for 2015 / 16 on
11 February 2015, which amounted to £66.42 at Band D.
•
Maldon District Council had approved its basic amount of tax for 2015 / 16 on
5 February 2015, which amounted to £178.88 at Band D (excluding parish
precepts) and £225.49 at Band D (including parish precepts).
19
RESOLVED
(i)
Essex
County
Council
that it be noted for the year 2015 / 16, Essex County Council has stated the
following amounts in precepts issued to the Council, in accordance with
Section 40 of the Local Government Finance Act 1992 as amended by the
Localism Act 2011 for each of the categories of dwellings shown below:
A
£724.50
(ii)
Essex
Fire
Authority
£845.25
C
D
E
F
G
H
£966.00 £1,086.75 £1,328.25 £1,569.75 £1,811.25 £2,173.50
that it be noted for the year 2015 / 16, Essex Fire Authority has stated the
following amounts in precepts issued to the Council, in accordance with
Section 40 of the Local Government Finance Act 1992 as amended by the
Localism Act 2011 for each of the categories of dwellings shown below:
A
B
£44.28
(iii)
Police & Crime
Commissioner
B
D
£59.04
E
£66.42
£81.18
F
G
£95.94
H
£110.70
£132.84
that it be noted for the year 2015 / 16, the Police and Crime Commissioner for
Essex has stated the following amounts in precepts issued to the Council, in
accordance with Section 40 of the Local Government Finance Act 1992 as
amended by the Localism Act 2011 for each of the categories of dwellings
shown below:
A
£98.10
(iv)
£51.66
C
B
£114.45
C
£130.80
D
£147.15
E
£179.85
F
£212.55
G
£245.25
that it be noted for the year 2015 / 16, this Council has stated the following
amounts, in accordance with Section 40 of the Local Government Finance Act
1992 as amended by the Localism Act 2011 for each of the categories of
dwellings shown below:
Parish / Town
Althorne
Asheldham
Bradwell-on-Sea
Burnham-on-Crouch
Cold Norton
Dengie
Goldhanger
Great Braxted
Great Totham
Hazeleigh
Heybridge
Langford
Latchingdon
Little Braxted
Little Totham
A
140.82
139.41
148.04
146.23
154.84
142.62
134.27
130.42
125.92
125.89
155.80
156.55
180.25
143.42
137.95
B
164.30
162.65
172.71
170.61
180.66
166.39
156.65
152.17
146.91
146.88
181.78
182.65
210.30
167.32
160.95
C
187.76
185.88
197.38
194.97
206.46
190.16
179.03
173.90
167.89
167.85
207.74
208.73
240.33
191.22
183.93
20
D
211.24
209.12
222.06
219.35
232.27
213.93
201.41
195.64
188.88
188.84
233.71
234.83
270.38
215.13
206.93
E
258.18
255.59
271.41
268.09
283.88
261.47
246.17
239.11
230.85
230.80
285.64
287.01
330.46
262.94
252.91
F
305.12
302.06
320.75
316.84
335.50
309.01
290.92
282.59
272.82
272.77
337.58
339.20
390.55
310.74
298.90
G
352.06
348.53
370.10
365.58
387.11
356.55
335.68
326.06
314.80
314.73
389.51
391.38
450.63
358.55
344.88
H
422.48
418.24
444.12
438.70
464.54
427.86
402.82
391.28
377.76
377.68
467.42
469.66
540.76
430.26
413.86
H
£294.30
Parish / Town
Maldon
Mayland
Mundon
North Fambridge
Purleigh
Southminster
St. Lawrence
Steeple
Stow Maries
Tillingham
Tollesbury
Tolleshunt D'arcy
Tolleshunt Knights
Tolleshunt Major
Ulting
Wickham Bishops
Woodham Mortimer
Woodham Walter
(v)
905.
A
159.94
154.28
139.80
143.55
157.13
155.00
144.13
137.61
167.80
165.94
158.52
147.68
137.38
137.42
147.48
127.54
125.89
145.00
B
186.61
180.00
163.10
167.48
183.32
180.83
168.16
160.55
195.77
193.60
184.95
172.29
160.29
160.32
172.06
148.81
146.88
169.18
C
213.26
205.71
186.40
191.40
209.51
206.66
192.17
183.48
223.73
221.25
211.36
196.90
183.18
183.22
196.64
170.06
167.85
193.34
D
239.92
231.43
209.70
215.33
235.70
232.50
216.20
206.42
251.70
248.91
237.79
221.52
206.08
206.13
221.22
191.32
188.84
217.51
E
293.23
282.86
256.30
263.18
288.08
284.17
264.24
252.29
307.63
304.22
290.63
270.75
251.87
251.94
270.38
233.83
230.80
265.84
F
346.55
334.29
302.90
311.03
340.45
335.83
312.29
298.16
363.56
359.53
343.47
319.97
297.67
297.74
319.54
276.35
272.77
314.18
G
399.86
385.71
349.50
358.88
392.83
387.50
360.33
344.03
419.50
414.85
396.31
369.20
343.46
343.55
368.70
318.86
314.73
362.51
H
479.84
462.86
419.40
430.66
471.40
465.00
432.40
412.84
503.40
497.82
475.58
443.04
412.16
412.26
442.44
382.64
377.68
435.02
that having calculated the aggregate in each case of the amounts at (i), (ii), (iii)
and (iv) above, the Council, in accordance with Section 30(2) of the Local
Government Finance Act 1992 as amended by the Localism Act 2011, hereby
sets the following amounts of council tax for the year 2015 / 16 for each of the
categories of dwellings shown at Appendix A to the report.
ANNUAL REVIEW OF FINANCIAL REGULATIONS AND CONTRACT
PROCEDURE RULES
The Committee considered the report of the Director of Resources outlining the
review undertaken to the Financial Regulations and Contract Procedure Rules and
proposed revisions following the annual review and implementation of the Senior
Management Review (SMR).
The changes to both documents were highlighted within the report. An updated
version of the Financial Regulations showing amendments was attached as Appendix
1. Amendments had also been made to Contract Procedure Rules and the revised
document was attached as Appendix 2. It was noted that changes to the Contract
Procedure Rules reflected changes to the Public Control Regulations which came into
force on 26 February 2015.
RECOMMENDED that the Financial Regulations and Contract Procedure Rules
attached as APPENDICES 5 and 6 to these Minutes, be approved.
21
906.
EXCLUSION OF THE PUBLIC AND PRESS
RESOLVED that under Section 100A(4) of the Local Government Act 1972, the
public be excluded from the meeting for the following items of business on the
grounds that they involve the likely disclosure of exempt information as defined in
Paragraph 3 of Part 1 of Schedule 12A to the Act, and that this satisfies the public
interest test.
907.
REVIEW OF BANKING ARRANGEMENTS
approval to extend the current contract for the provision of banking services into 2015
/ 16 and to undertake a review during this period to period to inform decision in
relation to future service provision.
The report set out current banking arrangements and the agreement of the Council in
2012 to extend the current contract for a period of three years, ending on 31 March
2015.
As part of the proposed review of banking arrangements an independent review and
benchmarking exercise would be undertaken to assist in informing decisions, the
results of which would be presented to this Committee. In response to a question
regarding consultancy costs relating to the review, Members were advised that these
would be similar to the costs paid in 2006.
RESOLVED
908.
(i)
that the current banking arrangements be continued until 31 March 2016;
(ii)
that Officers approach suitable consultancy services to carry out a review and
benchmarking exercise of the existing services and provide recommendations
for consideration at a future meeting of this Committee.
COMMITTEE MANAGEMENT SYSTEM
approval to purchasing an Electronic Committee Management System.
The business case relating to the proposed purchase was attached as Appendix 1 and
provided details of the costs relating to purchasing an Electronic Committee
Management System. The key objectives of the project and business benefits were set
out in the report. It was noted that three potential suppliers had recently attended the
Council to demonstrate their product to a small group of Officers and Members and
the results of this day were summarised.
Members were advised that investment in a Committee Management System would
represent the first step in a Transformational Programme outlined within the
22
Council’s ICT Strategy designed to reduce operating costs, improve services and
deliver technology-based services fit for the 21st century.
In response to a number of questions the IT Manager provided the following
information:
•
In respect of broadband signal problems, Members were advised how the
proposed product had a secure area on the device where it would download
papers to. In addition the system would automatically stop and then continue
downloads when moved out and then back in range of a broadband signal.
•
one of the benefits was that as Members would not be accessing the network
to view Committee documents with the new system the restrictions in respect
of the Public Services Network were relaxed.
Following further discussion Councillor A S Fluker proposed that the
recommendations as set out in the report be agreed. This was duly agreed by the
Committee.
RESOLVED
(i)
that the Council purchases the Modern.Gov Electronic Committee
Management System from Modern Mindset Ltd, with a target implementation
date of May 2015;
(ii)
that the first year’s costs for this project (£12,500) be met from the Council’s
Making Our Future Fund, with subsequent costs becoming essential growth
for the next financial years, be noted;
(iii)
that subject to further information and clarification, the principle of
Committee Services and other staff as required being offered additional hours,
financed through the Making Our Future Fund, to facilitate delivery of this
project within the proposed timescales, be endorsed.
There being no further items of business, the Chairman closed the meeting at 8:30pm.
D M SISMEY
CHAIRMAN
23
This page has been purposely left blank
APPENDIX 1
Document Control Sheet
Document title
Summary of purpose
Prepared by
Pay Policy Statement
Compliance with Localism Act
Strategic People, Performance and Policy Manager
Status
Draft (to Finance & Corporate Services Committee
– March / Council - April)
3
Version number
Approved by
Approval date
Date of implementation
Review frequency
Next review date
Circulation
Published on the
Council’s website
Immediate
Annual (or as necessary before then)
January 2016
Yes
Validity Statement
This document is due for review by the date shown above, after which it may become
invalid. Users of the strategy or policy should ensure that they are consulting the
currently valid version of the document.
1/5
APPENDIX 1
Pay Policy Statement
Note: This Statement has been written to meet the statutory requirements of the
Localism Act 2011 and to aid transparency in respect of Maldon District Council’s
policy regarding pay to the highest and lowest paid staff.
1.
General policy
1.1
The Council has undertaken a Job Evaluation exercise which reviewed every
post in the Council, up to and including the Chief Executive, on a consistent
basis and placed them within a single unified pay scale. The pay scale was
designed to be consistent with best practice and benchmarked as to value and
applies up to and including Director level. In accordance with the Council’s
constitution, the remuneration of the posts of Chief Executive and Directors
were set by the Appointments Committee composed of elected Members of
the authority.
1.2
The Job Evaluation process was designed to achieve compliance with Equal
Pay legislation and, further to this, the contractual terms and conditions of staff
were also standardised at the same time. The effect is that the remuneration
of all Council employees is governed by a single set of policies and
procedures. This is reflected in the Pay Policy statements below.
1.3
The pay multiple for 15/16 is based on the median average FTE salary is 4.38
(SCP 20). This figure is higher than the figures included previously, as the
previous figures had been calculated using a mean average calculation (i.e.
dividing total gross salary costs by the total FTE figures) rather than a median
average calculation (i.e. the middle FTE salary figure of all employees).
This multiple is well within acceptable bounds. The Government has
considered setting twenty to one as a maximum. As a result it is not
considered necessary to have a specific policy concerning the pay multiple. If
the multiple starts to rise, for example above five to one, this could be
reconsidered.
2.
Policy regarding pay to “Chief Officers”
2.1
Definition of “Chief Officers” for the purposes of this statement
2.1.1 The term “Chief Officer” as employed in the Localism Act has a different
meaning to the use made of it at Maldon District Council. For the purposes of
this Pay Policy Statement only, the relevant posts are considered to be:
•
•
•
2.2
Chief Executive
The three Director posts
The Monitoring Officer
Pay
2.2.1 Pay for the posts of Chief Executive was set by the Member Appointments
Panel d process and approved by the Council. The role of Director was
2/5
APPENDIX 1
introduced following the 2014 Senior Management Review and pay set by the
Job Evaluation process. Now the pay line has been set it is subject to the
same factors as the rest of staff pay, for example any annual pay award
granted.
2.2.2 Any exception to this, such as a proposal to change the pay of senior staff out
of line with normal pay awards would be subject to a report to the Council and
approval being given.
2.2.3 An additional consideration is that the Chief Executive has delegated powers
to award discretionary points on an officer’s salary scale within approved
budgetary limits where they deem it to be in the interests of the Authority.
This only applies to points up to the maximum of the salary band for that post.
2.3
Performance related pay and bonuses
2.3.1 Maldon District Council does not have performance related pay or bonus
payments for any staff. As there is no mechanism for linking pay and
performance in this way ‘earn back’ arrangements are also not appropriate.
2.4
Fees, allowances, benefits in kind and expenses
2.4.1 The Chief Executive is also the Returning Officer for the District, meaning that
the post holder has specific responsibilities in respect of all elections and
national referenda held in the District. These duties attract fees that are
variable depending on the election. For Parliamentary and European
elections and national referenda these are set by the Government. For
County elections there are set by Essex County Council. For District and
Parish elections they are set locally.
2.4.2 Apart from this no fees, allowances, benefits on kind or expenses are
available to the posts listed in 2.1, other than those available to all staff and on
the same basis.
2.5
Pension
2.5.1 All staff are eligible to join the Local Government Pension Scheme in
accordance with the terms of that scheme. No special considerations apply to
the posts listed in 2.1.
2.6
Severance payments
2.6.1 Where senior staff leave in the normal course of business (resignation,
retirement, etc.) the same procedures would be applied as for any other staff
member and no additional payments would arise as a result.
2.6.2 Should a senior post be made redundant the post holder would receive
redundancy payments in accordance with the Council’s Managing
Organisational Change policy that applies to all staff. The Council’s policy is
not to award any additional compensatory payments to staff.
3/5
APPENDIX 1
2.6.3 Should a senior staff member leave as a result of a settlement agreement
these, by their nature, are subject to negotiation with the individual and their
representatives and so are variable in their terms. Such agreements are
formal legal arrangements and confidentiality binding on both parties is a key
component, so any payment arising from such an agreement would not be
published. Authorisation of the payment would be in accordance with the
Council’s terms of reference and scheme of delegation and it would need to
represent value for money for the taxpayer in the circumstances.
2.6.4 Senior staff that were previously employed by the Authority and left with a
severance or redundancy payment may be re-employed on a consultancy
basis to cover short term staff pressures where it is considered appropriate in
the pubic interest to do so.
2.7
Recruitment of senior staff
2.7.1 When recruiting to a senior post the salary offered would be that applicable to
the grade of the post, as determined by Job Evaluation, and within the
established pay line. No additional payments would arise, unless a market
supplement to enable recruitment was considered justified due to a
recognised technical skill shortage in the job market.
2.7.2 In the event that a senior post were to be filled by a person who had retired
from another Authority and was in receipt of a pension it would be arranged so
that the person was not better off overall, through abatement of pension
and/or pay as applicable.
2.7.3 In accordance with the guidance set out in the Localism Act, Full council
should be given the opportunity to vote before large salary packages (£100k
or above) offered in respect of a new appointment. This will be considered by
the Council should the opportunity arise in the future.”
2.8
Monitoring Officer
2.8.1
The appointment of Monitoring Officer was undertaken by the Appointments
Committee on 23 June 2014 and this is not subject to any addition payment.
2.9
Publication of remuneration of senior staff
2.9.1 This Pay Policy Statement, once approved by the Council, will be published
on the Council’s website.
2.9.2 The remuneration and pension contributions of the posts listed in 2.1 above
are published annually in the Financial Statements of the Authority and a copy
placed on the website.
4/5
APPENDIX 1
3.
Lowest paid staff
3.1
Definition
3.1.1 The lowest paid staff at Maldon District Council are those in Pay Band A
(£13,413 to £13,983). This definition has been chosen as reflecting the reality
of the pay line. The posts in Band A were placed there as a result of the
Council’s Job Evaluation scheme.
3.2
Pay Policy in respect of lowest paid staff
3.2.1 On the whole no special considerations apply to the lowest paid staff. They
are subject to identical terms and conditions, procedures and policies as all
other staff. In some cases these policies give slightly different benefits to
different levels of staff. For example the lowest five pay bands (A to E) an
enhanced pay rates for overtime is paid. No enhancement above grade E is
paid. In contrast the basic amount of annual leave increases with pay.
Overtime is only paid in exceptional circumstances to staff.
5/5
APP
PENDIX 2
Workfo
orce Develop
pment Plan
Strate
egic P
Plan for
f Pe
eople
& Wo
orkforrce
Developm
ment
2015 - 20119
ur Vision
Peop
ple, Pe
erform
mancce & Policy
P y
1
APPENDIX 2
Maldon District Council
Our Corporate Plan 2015
Our Corporate Plan outlines the vision for the
council and the priorities we will focus on to
achieve our vision. These priorities are then
further developed in directorate and service plans
to set the focus for each area within the council.
These strategies help us understand and plan for
the opportunities and challenges ahead.
Our Vision
Working in partnership to make the
Maldon District a better place to
live, work and enjoy
Supporting our Corporate Plan is our Medium
Term Financial Plan. It outlines the funding that
we receive and how we plan to use it across our
directorates. The Medium Term Financial Plan also
includes the staffing budget.
Our Goals
1.
Helping communities to be safe,
active and healthy
2.
When read together the Corporate Plan, the
Medium Term Financial Plan and our Workforce
Development Plan & ICT Strategy describe how we
will deliver and achieve our vision. Together they
describe the priorities the council will pursue, the
resources that will be available to achieve these,
and the shape, culture and processes which the
council’s workforce will adopt to meet the
challenges of the future.
District
3.
Medium Term
Financial Plan
Creating opportunities for
economic growth and prosperity
4.
Delivering good quality, cost
effective and valued services
5.
Corporate Plan
Protecting and shaping the
Focusing on key projects
Strtegic Plan
for People &
Workforce
Development
ICT
Strategy
The Strategic Plan for People and Workforce Development is a four year plan providing an essential
framework to help us make the best decisions about our workforce to help us deliver against our
Corporate Plan. The plan will be reviewed annually to take into account any changed priorities.
V. 1.6 - Feb 2015
2
APPENDIX 2
Workforce Development Plan
Our People Strategy
The overall size of our workforce has remained relatively static over recent years, although the
Senior Management Review reorganisation has resulted in a small reduction in the workforce. This
reflects the changing nature of services and the need to achieve efficiencies in our service delivery.
The statistics set out in this plan reflect the staffing position as of 31 December 2014. Going forward
we will review the staff position at the end of September each year. This date has been chosen so
that a comparison can be made year on year and it is also the commencement of the workforce
planning process which will be integrated with the service and budget planning..
32% of our employees work part time. 64% of our workforce is female and 36% male. Only 10% of
our workforce is aged under 25 and 47% of our workforce are aged between 46 and 65 years of
age.
The new Human Resource Information System [HRIS] will improve our data recording and reporting
and will be reflected in the WDP annual review.
The Council’s traditional personnel function has transformed to a more strategic Human Resources
and Organisational Development (HR & OD) model and is now part of a wider service working
together to be more proactive with plans for our people and wider community, to be better able to
help to improve Maldon District Council and unlock our potential. The primary focus of this Service is
to develop, support and steer cultural and transformational change. The composition of the Service
is broken down as follows:
People, Performance and Policy
People
Public Relations and
Engagement
Policy and
Performance
• Aims and challenges
This Workforce Development plan identifies how we meet current and future people needs. We
have innovative plans to ensure we have highly skilled people to deliver high quality services.
People (Workforce) Planning aims to:
• understand the medium/long term skills gaps of employees and identify solutions;
• develop a productive and skilled workforce;
• engage and support employees in organisational change;
• have policies that support diversity and good people management.
How we aim to achieve this through our people
The aims of our People Strategy are to:
• enhance the value of the contribution made by every employee;
• focus employee contribution on organisational priorities;
• deliver improved organisational performance;
• become an employer of choice;
• improve employee engagement.
3
APPENDIX 2
• What are our challenges?
As we develop the organisation, delivering the best services to the people of Maldon in new ways,
including through partners, we need to develop our people and use systems and processes with
efficiency, rigour, dynamism and innovation. The shape, structure and demands on our workforce
will by necessity change significantly over the coming years. The economic climate will put pressure
on public sector budgets and there will be a renewed focus on effective resource management. The
public sector delivery model will continue to evolve, with an increased focus on new approaches to
service delivery, new more flexible relationships across the public sector and more partnership
working.
Labour market pressures
The Council is one of the largest employers in the district. We experience challenges recruiting and
retaining certain skills sets, in areas such as Planning and Building Control. Our neighbouring
councils are recruiting from the same pool of candidates and are experiencing the same challenges.
However, our most recent recruitment campaigns, promoting Maldon as a place to live and work
have attracted high calibre professionals to the Council.
Demographic changes
The population of the Maldon district is ageing considerably; this means there are a growing number
of older people within our community and increasing demand and pressure on our services. There is
also a risk of migration of young people out of Maldon meaning that our potential employee pool is
reducing.
Developments in technology
We are using technology as a key resource to modernise and
improve the way we work and deliver services. We are looking at
different ways to use technology to improve how we work in the
future, enabling staff to work more flexibly. This includes
supporting staff to become more mobile and work remotely or
from home.
Financial Pressures
Along with the rest of the Local Government sector, Maldon District Council continues to face
significant reduction in funding from Central Government. In particular, the Council’s core
grant has been reduced by over 40% since the Government’s Austerity Programme in 2010.
Going forward, the Chancellor of the Exchequer has already indicated that funding for Local
Government will continue to decline until at least 2018. Our Medium Term Financial Plan
assumes a savings programme of £0.5m will be required for 2016/17.
Changing the way we work
We will change the way we operate as a council and become more business-like. We will do
this by: Use ICT and modern technology to improve our services. Simplify our policies, systems
and processes. Simplify our staffing structures, empowering our managers and staff to make
decisions. Communicate in a clear and consistent way.
• Priority themes and actions 2015-18
This strategic plan was agreed by the Corporate Leadership Team in January 2015. Developing the
culture based around the Council’s Vision and Values sits at the heart of the strategy. The outcomes
of the People Strategy and plans are to be:
1. a high performing organisation;
V. 1.6 - Feb 2015
4
APP
PENDIX 2
Workfo
orce Develop
pment Plan
22. a learningg organisatio
on;
33. an emplo
oyer of choice;
44. a healthyy organisation;
We aim to achievve this througgh the follow
wing activitie
es:
Cu
ulture, Viision and
d Values
Leadersship
1. High
H Perfoorming Orgganisation
n
Reecruitment an
nd Selection
Performaance Managem
ment
People Engaggement
2. Employer of Ch
hoice
Pay and Rewards
Terms
T
and Coonditions
3. Learning Organisation
Change and continuous im
mprovement
Wellbeing
Self De
evelopment
4. Healthhy Organissation
Flexible working
• The Cou
uncil’s Vission
W
Working in paartnership to
o make the M
Maldon Distrrict a better place
p
to live,, work and enjoy
• How do
o we develop the organisational culture for M
Maldon Disstrict
Councill?
M
Many of the activities
a
inccluded in thiss document will influence the deve lopment of a consistentt
cu
ulture. Howeever there also needs to be an overaarching programme to drrive culture change. Thee
“M
Making it Haappen” transformation board, will be the main
n driver for change. It will addresss
am
mongst others:
• changes to
t working practices;
p
• process im
mprovement and busineess process re
e-engineerin
ng.
Th
he People, Performance and Policy t eam will sup
pport culture
e change thrrough a num
mber of
acctivities inclu
uding:
• behaviou
ur and compe
etencies to r eflect the vissions and values;
ole modelling good practtice;
• leaders ro
me managem
ment of all chhange prograammes;
• programm
• Our Core Values
Ass a result off the CLT sen
nior manageer and Mem
mber corpora
ate plan sesssions, work has already
co
ommenced on
o our core values
v
that u nderpin how
w we go abou
ut our work.
To
o guide the achievement
a
t of our visioon we need to embed our
o Core Vallues. The WDP
W aims to
en
nsure that ou
ur values are
e “lived” andd permeate the entire organisation, such that th
hey become
paart of the culture and em
mbedded intoo our everyd
day working practice. W
With this in mind,
m
we will
bee seeking feeedback on what our coree values shou
uld be from our
o workforcce and Memb
bers
5
APPENDIX 2
Our core values - that underpin how we go about our work
•
•
•
•
•
•
•
•
customers first
strong and empowering leadership
developing and valuing our staff
a flexible one team approach
focused on high performance and positive outcomes
open and accountable
professional and respectful
embracing partnership working
A high performing organisation
The integration of the People, Performance and Policy team will focus on strategic issues to help the
council achieve efficiency savings through a variety of means such as:
•
•
•
•
•
helping managers to develop people management skills to increase performance, skills and
productivity;
improve retention of key skills;
reduce stress and absence and related sickness and turnover costs;
reduce recruitment advertising costs;
reduce the costs of restructuring;
• reduce legal costs through effective employee relations that resolve grievances and disputes
as soon as possible.
The new HRIS will be developed to support the continuing people and organisational development
in Maldon District Council. This will include a new performance management and development
system with components that include:
•
•
•
•
a standard competency framework;
a leadership competency framework;
Performance Development Reviews;
Performance Rating Scale.
This will replace the PDP system currently in operation.
A key priority will be to develop our core competencies and behaviours framework to underpin our
people management practices.
• Leadership Development Programme
The learning and development programme will be sourced to enhance personal effectiveness of our
leaders and managers and to equip them for the future challenges ahead.
The objective will be to achieve the following:
•
to increase self-awareness and awareness of others
•
to enable participants to critically evaluate the leadership challenges facing local government
•
to provide participants with high level capabilities in strategic management and leadership.
V. 1.6 - Feb 2015
6
APP
PENDIX 2
Workfo
orce Develop
pment Plan
Suggeested conten
nt will include:
• leadeership modells
• new operating
o
models
• financial management
• procu
urement and
d commerciaal awareness
• projeect and people managem
ment
• engaggement
• workking in a polittical context
• deliveering results
• developing self
A leearning organissation
d
nt opportunitties available
e from April 22015 including:
Theree will be a range of new developmen
• commitmeent to the de
evelopment for all;
• more apprenticeships across the bbusiness;
mes for all em
mployees covvering a rangge of
• programm
topics for example, Eq
quality and D
Diversity,
Safeguard
ding, Attenda
ance Manageement, Engaging
People thrrough change, Personal SSafety and Corporate
Induction;;
s
ment;
• eLearning to support self-developm
p
skills traininng and develo
opment.
• on-going professional
Our kkey prioritiess will be to:
• introducee a leadership and managgement deve
elopment fra
amework, wiith a key focus upon the
‘expectattions of beingg a managerr’ within the council.
c
and
d mentoring skills acrosss our leaders and manageers.
• Develop coaching
f
to
t identify annd develop future manag
gers and leadders.
• Create a framework
We w
will also be deeveloping otther opportuunities to pro
ovide access for example action learn
ning sets,
projeect work, and
d secondmen
nts. This will help to better meet the needs of ou r people; and harness
the huge range off skills and ta
alent within the Council.
• In
nvestmentt in our Pe
eople
Our p
people are att the heart of
o the servicees that we are here to deliver. Our s uccess will be
b as a
directt result of th
heir committment, dediccation, skills,, capabilitiess and profes sionalism. We
W are
comm
mitted to con
ntinuing to develop
d
and iinvest in all of
o our people.
ng, we will se
eek recognittion status in
n the Investors in People (IiP) standarrd. We
Budgets permittin
nsforming bu
usiness perfformance th
hrough
are kkeen to worrk with IiP as it specia lises in tran
People.
will be activeely seeking recognition
r
as soon as possible.
p
We
W will investt in our peo
ople to
We w
devellop their skills and capab
bilities and too re-skill, re-ttrain and re--deploy wherrever possible.
• Change and
d continuo
ous improovement
We aare changingg the way we operate ass a council and
a are reviewing our sstaffing strucctures,
introd
ducing moree effective management
m
t layers and empowering
g staff to maake decision
ns. We
will o
operate in a more business-like maanner, deplo
oying our hu
uman and fiinancial reso
ources
effecttively againsst our key priorities to ddeliver the best
b
outcom
mes for the ppeople of Maldon.
7
APPENDIX 2
We will develop our employees’ skills and knowledge to meet service requirements, enhance
their performance and increase mobility within the council.
•
•
•
•
•
•
•
•
•
•
•
•
•
•
embedding our core values;
improving employee engagement, morale and job satisfaction;
developing leadership and Member capability;
development of Workforce Planning and integration across directorates;
recruiting, retaining and developing our own talent - addressing current and future
employee shortages and skills gaps;
providing consistent opportunities for job related training and career development;
delivering focused succession planning and skills growth;
provide opportunities for the development of young people and develop our work
experience, apprenticeship and traineeship programmes, in addition to potential
graduate programmes.
actively managing and improving attendance;
creating an environment to support IT and Facilities strategy to enable the use of
remote and home working, optimising the efficient use of time and space
reviewing and refining job roles to meet future demands;
managing the challenges of ageing employee profiles in particular areas;
developing Equality and Diversity – Equalities Framework for Local Government
controlling the use and costs of agency workers, consultants and interims.
A healthy organisation
A safe and healthy working environment is essential if we are to have a motivated, engaged
and productive workforce. As one of the largest employers in Maldon district, promoting the
health of our people also has the potential to benefit the health of their families and the wider
community and help achieve the improvements in community health and wellbeing.
We will continue to support a range of health, safety and wellbeing initiatives aimed at:
•
•
•
•
•
•
reducing ill health in employees caused by or made worse by work;
helping employees who have been ill, whether or not this is work related, to return to
work;
promoting positive mental health;
using the work environment to help employees maintain or improve their health;
encouraging a positive health, safety and wellbeing culture;
promoting healthy lifestyles.
A healthy organisation is one which has clarity of purpose, focus, effective leadership and
management and respectful relationships; where inappropriate behaviour is not tolerated, and
which acknowledges, values, rewards and celebrates individual contribution. Achieving the aspiration
to be a healthy organisation depends as much on success in other areas of this workforce
development strategy as in the those readily identifiable as related directly to health, safety and
wellbeing.
An employer of choice
To retain key skills and attract new talent in areas of high demand and relative scarcity the Council
needs to establish its reputation as an employer of choice.
V. 1.6 - Feb 2015
8
APP
PENDIX 2
Workfo
orce Develop
pment Plan
Much
h of what we
w plan to im
mprove acrooss all aspectts of the wo
orking enviroonment will assist us to
o
achieeve this becaause if we can improve how our existing emplo
oyees feel abbout the Cou
uncil we aree
less likely to lose them and th
hey are likelyy to be good ambassadorrs encouragi ng others to
o think aboutt
workking for the Council. As well as adddressing skills shortages we also neeed to remove potentiall
barrieers to emplo
oyment that our policiess, procedures and practicces may pressent to grou
ups currentlyy
undeer representeed in the worrkforce.
As a ‘Two Ticks’’ employer, Maldon aim
ms to suppo
ort people with
w
disabiliities into
employment. We
W have alrea
ady:
• writteen a code of practicce and goo
od practice guidelines for the
employment of disabled
d
peopple.
• issued guidance to
t managers on undertakking reasonable adjustmeents on an annual basis
• continued to train
n managers on best pracctice and safe
er recruitmeent.
The n
next steps arre to:
•
•
•
•
review the guidan
nce given to applicants on
o completing the Counccil application
n form
duce a spot-checking pprocess at the shortlisting stage tto ensure people
p
with
h
introd
disab
bilities are no
ot being sele cted out unffairly
review and revise
e all training courses in re
elation to divversity and ddisability
introd
wareness, physical
duce disabillity specific training such as menttal health aw
p
and
d
senso
ory awareness
• Employyee engagement
Em
mployee enggagement is important
i
too measure ass it goes far beyond
b
just ssimple job sa
atisfaction.
En
ngaged emplloyees help to
t drive orgaanisational performance and tend to be much mo
ore content
in their job.
Our key priorities will be to create ann environme
ent which increases empployee involvement and
d
en
ncourages in
nnovation, th
hat lets empl oyees develo
op to their fu
ull potential..
W
We will listen
n to the view
ws of emplooyees and trade unionss and introdduce a new trade union
n
reecognition agreement. We
W will builld upon ourr employeess’ commitmeent to our priorities byy
co
ommunicatin
ng in a clear and consisteent way. We will work to
o make emplloyees feel valued
v
whilstt
att the same time enhancin
ng their ownn sense of we
ellbeing.
W
We will fosterr a culture off creativity, ttrust and ind
dependence – investing iin new ideass to improvee
what we do an
nd how we do
d it at all levvels.
• The Em
mploymentt Deal [Staaff Survey]
In June 2014,, the Counciil introducedd a new staaff survey,
al” supportted by th
he Local
“TThe Employyment Dea
Go
overnment Association (LGA) andd the Public Service
Peeople Managgers’ Associa
ation (PPMA)), which meaasures the
em
mployee value proposition [EVP], i..e. the uniq
que set of
beenefits which
h an employee receives iin return forr the skills,
caapabilities an
nd experiencce they brinng to an orgganisation.
Th
he Council compares favourably with group
p average
accross Councils using this methodologgy.
9
APPENDIX 2
The survey tells us that we have a committed workforce, which invests their time, energies and
concentration to get the job done. There is a sense of pride within the workforce with high job
engagement and efficacy. Most reported good conversations and dialogue with their managers.
The survey also highlighted areas for the Council to focus on:
•
•
•
maintaining team cohesion and good quality conversations at team level to problem
solve and service delivery
continue initiatives to improve culture for speaking up – encouraging ideas for
improvement, feeling confident that our people are listened to in the right spirit
restate obligations to the workforce, setting out a new vision for the future and how to
shape the employment relationship with staff
The WDP has incorporated the outcomes of the survey and we will undertake a “mini pulse
survey” to gauge and evaluate employee satisfaction, to the interventions undertaken from the
full survey.
• Recruitment Strategy
With current financial pressures and the economic down-turn, delivering the demanding
efficiencies that will be required without impacting on frontline services will need
talented people in the right roles – so recruiting strategically is of great importance.
Our strategic approach to recruitment will focus on aligning our resourcing strategy with
long term corporate objectives, connecting recruitment with our values whilst
maintaining flexibility in the workforce. Today, attracting and retaining the best
candidates from the widest possible pool truly requires new strategies in recruitment
practices to entice the wealth of talented and enthusiastic candidates in a competitive
market place.
Recruitment is an expensive process, but of equal importance is that wrong recruitment
decisions can have costly implications if the appropriate people are not identified, both in
terms of the organisational performance and high labour turnover.
We want to attract a good quality pool of candidates with the right knowledge, skills and
attitude to enable us to appoint the best candidate for the job.
V. 1.6 - Feb 2015
10
APPENDIX 2
Workforce Development Forward Plan
Employer of Choice
Resourcing
Action Points
15/16
16/17
Develop Recruitment strategy
Implement the on–boarding module of the HRIS
Implement recruitment module of the HRIS
Review all recruitment process and administration including
policy changes to improve customer experience.
17/18
18/19
Outcomes
•
•
•
to build organisational capacity
attract the best talent available.
Reduce time to hire and increase retention.
•
•
•
Greater efficiency in recruitment
Greater Flexibility –ability to cope with peaks and troughs
Able to realise savings from the use of different approaches
to recruitment or to redirect recruitment spend to areas of
greatest need
To achieve employer of choice
•
Develop Maldon as an ‘Employer of Choice’ – Review the
current branding and benchmark against the best of the
public and private sector
•
Reinstate Two Ticks commitment and Implement the
recommendations associated with the Two Ticks Inspection
when associated actions identified through the Maldon as
Employer of Disabled People initiative
•
Reviewing the online jobs portal experience and
employer brand to enhance the candidate experience in
applying for Council jobs
•
•
•
11
More and better quality candidates, improved
appointments
Fewer failed appointments (monitor turnover in first two
years of appointment)
Increased numbers of disabled employees – reflect the
community
Widen the recruitment pool and improve the chance of
appointing the ‘right person at the right time’
Assists in the drive towards younger employees in the
workforce
APPENDIX 2
15/16
Action Points
16/17
17/18 18/19
Outcomes
Develop a consistent and effective recruitment process
across the council that enhances the candidate experience
Develop Modern Apprenticeships programme and work
placements as a method for promoting the employment of
younger employees and to promote benefits of
apprenticeship schemes to the wider community.
•
•
Increase the number of younger employees
As role model to employers in the locality o encourage
more opportunities for young people
Work within the revised temporary agency workers
framework and with centralised provider(s) to promote
temporary workers as a gateway to working for Maldon for
targeted groups (e.g. young employees, disabled,
unemployed, people from within Maldon with higher
unemployment)
•
Cashable and non-cashable savings
Employer of choice
Pay and Reward
Action Points
15/16
16/17
17/18
18/19
Outcomes
•
•
Ensure that Maldon can recruit in hard to fill areas
Ensure that we retain in hard to fill and high turnover
areas
Complete work commenced on the Allowance Framework
•
•
Reduction in overtime bill
Consistent approach to pay and benefits across all of
the Council
Introduce Total Reward Policy
•
To support “New Deal” and promote pay and benefits
“the offer”
Review the current Market Supplement scheme and
associated payments in light of the revised corporate
‘hotspot’ definitions.
12
APPENDIX 2
Learning organisation
Learning and Development
Action Points
15/16
16/17
17/18
18/19
Outcomes
Implement the priority training and development activities for
the forthcoming year.
•
More efficient use of training spend
Allow contingency within the corporate training budget for
unforeseen training needs relating to corporate projects
•
•
More efficient use of training spend
Allows for more responsive service
Populate HRIS with training menu to reflect revised service
and corporate requirements
• Better communication of training objectives and courses
Research the feasibility for Corporate Investors In People (IIP)
accreditation for Maldon
Develop new Appraisal scheme (Performance Management &
Development
•
•
Meet IiP accreditation objectives
Workforce better-informed
•
Training aligned with organisational objectives
•
•
Align individual and organisational objectives
Better use of training resources
•
embed the Council’s values
•
•
•
Ensure that staff are trained to do their job
Links with corporate objective to achieve IiP status
Overall efficiency in total spend on training budget
New Competency Framework and behaviours framework
To set targets for training and development activities per
employee and monitor against targets. Implement annual
review of training and development within the organisation,
reported back to CLT
13
APPENDIX 2
Action Points
15/16
16/17
17/18
18/19
Outcomes
Re launch Modern Apprenticeship Scheme within the Council,
including potential specialist apprenticeship
scheme/traineeship for Job shortage areas
• Increase the percentage of younger people within Maldon
• To build resilience and organisational capacity
Complete the rollout of the Employee Engagement
programme throughout the Council
• Improved staff morale, improved retention and higher
productivity
Review the current induction process and ensure that
corporate, departmental and manager induction processes
are consistent and fit for purpose
Clearer roles and responsibilities
Review Healthy Workforce programme including expansion of
programme throughout the years, promotion of healthy
lifestyle, cycling to work and stress management programme
•
•
•
Reduce stress within the organisation
Reduce absence overall
Cost savings
Conduct a Council-wide Skills Audit and review against
expected future needs and areas where skill levels are
deemed to be insufficient
•
•
•
Better use of internal resources
Reduce reliance on external consultants; save on fees
Improved employee engagement
Review Flexible Working Schemes, update policies and re
launch schemes where appropriate
•
•
•
Better use of resources
Save on office space
Compliance with legislation
14
APPENDIX 2
Healthy Organisation
Health and Wellbeing
Action Points
15/16
16/17
17/18
Outcomes
18/19
Review Attendance Management Strategy and
Implementation Plan and issue for consultation
Procure alternative occupational health provision
•
•
•
Develop and implement procedure “managing the causes of
work related stress” and issue for consultation.
Revisit training for managers & employees to ensure
they are better equipped to prevent stressful situations
occurring and provide effective support
•
•
•
•
Reduction in sickness
Meet Key Performance Indicator (KPI) Targets
To complement the Attendance Management
Strategy
To support learning and ongoing understanding
To know how and when to act
Reduction in sickness
Meet KPI Targets
High performing organisation
Employee Engagement
Action Points
15/16
16/17
Consider further Employee Wellbeing initiatives
Implement recommendations from the Employment New Deal
Survey
Commit to pulse survey
Encourage joint working across the different services within the
council
Introduce a new trade union recognition agreement.
Communicate key messages in a clear and consistent way
17/18
18/19
Outcomes
•
•
•
Improve motivation
Supporting health initiatives
Engaged workforce
•
•
•
•
•
to increase shared learning and expertise
encourage one team approach
enhance employer / employee relationship
joint working for the benefit of the workforce
ensuring that employees understand their
contribution to our priorities.
Encourage more innovation: balancing risks and
opportunities
To capture good ideas
foster a listening culture
•
Celebrate our success, recognising great ideas and contribution
from employees at all levels.
•
•
15
APPENDIX 2
Action Points
15/16
16/17
17/18
18/19
Outcomes
•
A shared understanding and shared ‘buy-in’ to the vision, goals
and values of the Council
Making sure that our core values are mirrored within our
strategies, plans and policies and delivered through our actions.
Establishing Action/Development Sets
•
•
•
•
•
To be able to connect the ‘Golden Thread’ from our
Corporate Plan, through Directorate, Service,
Workforce and Team Plans to individual objectives
and actions.
Fully appreciate the critical role they play in
bringing about changes
Gain a perception of the current climate
Capture visions for the future
Explore own personal values and those values
which they believe are important for the
organisation
To support achievement of the vision
High performing organisation
Information Technology
Action Points
15/16
16/17
17/18
18/19
Outcomes
Implementation of Human Resources Information System (HRIS)
and self service
•
A strategic, fully-configurable Human Capital
Management (HCM) solution.
Back scanning of personnel files
•
•
Improved document control and security
Maximised office space
Review benefits of development of in house microsite to
compliment recruit module of HRIS.
•
•
Cost savings
Employer brand ad attraction
Development and implementation of website
•
•
Improved customer experience
Employer brand
Review of TEN system
•
to evaluate risk of withdrawal of software support and
improved application
16
APPENDIX 3
( DRAFT )
I.C.T. Strategy
2015 / 2019
APPENDIX 3
Contents
Section
Description
Front Cover
Contents
Document Control Information & Distribution
Page
1
2
Introduction
Strategic Drivers
PEST Analysis
Developing the Strategy
Part 1
Part 2
Part 3
Strategic Aims
Sourcing and Procurement Strategies
Channel Migration
Managing Information
Streamlining Business Processes
6
8
11
13
Delivering the Strategy
Technical Architecture
Service-led Projects
16
22
Making it Happen
Programme Management
Draft Programme of Activities
23
24
Conclusions
Appendix A
3
4
5
27
Table of Service Defined Requirements
ICT Strategy 2014/19 V0.2
Issue date 19/02/2015
28
Page 1 of 30
APPENDIX 3
Document Control
Document Version Control
Revision date
Version(s)
01/12/2014
Draft 0.1
15/01/2015
Draft 0.2
Summary of Changes
First Draft ICT Strategy
Part 2 written and Part 1 amended to reflect
feedback received from CLT.
Changes
marked
No
No
Circulated For Approval
Name
Title
Corporate Leadership Team
Finance and Corporate Services
Committee
Date of Issue
Version
28/01/15
19/02/15
0.2
0.2
Date of Issue
Version
Circulated For Review
Name
Title
Amendment Procedures
Amendments to this document prior to approval will be by single issue of the whole
document.
Amendments at periodic review stages will be under separate cover
Page 2 of 30
APPENDIX 3
Introduction
Maldon District Council has a good track record in delivery of ICT services,
which is reflected in its excellent reputation at both Local and National level. This
has been built on a realistic and cost-conscious approach to previous ICT Strategies,
and some innovative approaches to leveraging the best “bang for buck” across all of
our ICT investments. However, this has inevitably meant sweating our assets to a
certain degree, and we have now reached an opportune moment to consider how we
can leverage new and existing technologies to meet our future obligations and
requirements in the most efficient and effective manner.
This Strategy will be split into two separate but fully integrated parts. The first
will consider strategic options for the future designed to improve services and
maintain our organisation reputation for effective and innovative use of IT solutions,
whilst the second will focus on the specific operational needs of our services. The
second part will be a very fluid and constantly changing plan as service needs evolve
and change in line with specific service requirements. However, the first part will
provide a set of longer term aims and ambitions that will help us to develop as an
organisation and deliver technology-based services fit for the 21st Century – a
Strategic Vision for the evolution of technology-based service delivery within Maldon
District Council.
Strategic Drivers
Along with most of the Public Sector, the Council faces some significant
financial challenges as it moves into the next few years. Reductions in Government
Grant will inevitably lead to a squeeze on corporate and service budgets, and it’s
likely that some tough decisions will need to be made. In this climate we simply can’t
afford to carry on as usual, and nor can we afford to simply automate individual
elements of existing practices and processes. Neither will yield the savings required,
and nor can we realise them through further sweating our assets, both human and
technological. If we are to continue to deliver quality services across our operations in
this age of austerity we will need to work smarter rather than harder, and find more
cost effective methods of meeting our obligations to the community we serve.
Against this we must balance the changing expectations of our users, including
Residents, Members and Staff. The speed of technological change continues to
accelerate at an alarming rate, and service consumers expect Local Authority
technology based services to match the services they experience through their
personal or private sector activities.
Over the last ten years there have been a plethora of Government initiatives
designed to exploit the potential advantages that could be realised through using new
technologies. Unfortunately these have only ever partially delivered against their
goals, largely because the technologies they championed were either juvenile or
simply not there. This is now changing, and whilst the requisite technologies can
certainly not be described as “mature” there are at least a range of potential suppliers
developing and enhancing solutions that would allow us to better meet our users
expectations.
Page 3 of 30
APPENDIX 3
Officers have appreciated these factors for some time, and as a result formed a
Member / Officer programme board known as the Making Our Future Board, or
Transformation Board. Whilst this is temporarily suspended pending a review of
internal boards arising from the Senior Management Review, it did define three key
strategic aims that remain relevant as we develop this new Strategy, these being :
• Resolution at the first point of Contact
• Helping our Residents to Help Themselves
• Focussing on end-to-end service delivery (ie – the whole customer
journey in a transaction and not just parts of it).
These three themes will form the backbone of our new ICT Strategy moving
forwards.
Our Volatile Environment
No Strategy exists in isolation – it must reflect not only the needs of the
specific Organisation it relates to, but also the external factors that influence that
Organisation. The ICT Strategy reflects key ambitions detailed within our Corporate
Plan, most specifically all of Goal 4 relating to the delivery of good value, cost
effective and valued services, but also underpinning many if not all of the other aims
and ambitions detailed within this core document. It also supports the developmental
ambitions detailed within our Workforce Development Plan at both strategic and
operational levels as we seek to develop and modernise our organisation.
The following Table provides a brief PEST (Political, Economic, Social and
Technological) analysis that analyses the main corporate drivers in the context of this
new Strategy :
Political
Economic
Social
Unclear, to a degree. There will be both National and Local
elections early in this Strategies life that may well radically change
its validity. The strategy must therefore remain flexible enough to
accommodate any such changes without detriment to its overall
strategic aims.
Whilst the elections mentioned above could affect the strategy,
there is currently no indication that the current financial pressures
affecting Local Government will ease, regardless of the Political
outcomes. Enabling improved services at reduced cost should
therefore remain a key driver in determining our future strategic
direction.
This will be the key influence in our strategic approach to future
service delivery. It’s useful to consider that the i-Pad was only
launched in the UK in October 2010, yet has now become
ubiquitous. The speed of evolution in technological adoption and
on-line social interaction isn’t going to slow down – this is a genie
that can’t be put back in the bottle. As a service provider we will
need to ensure that we meet our clients expectations, and that we
Page 4 of 30
APPENDIX 3
Technological
reflect their changing preferences in our service delivery models.
After many false starts by Suppliers and Government the
technology is nearly there to deliver against our users aspirations.
This will undoubtedly require some investment, and this must be
done on a strategic as opposed to piecemeal basis if we are to gain
the full benefits from the new ways of working. As a Council we
have been quite good at delivering this in the past. As we move
forward we will need to ensure that we maintain the “big picture”
ambitions whilst not losing sight of operational imperatives. This
can be a tricky balancing act to pull off with limited resources, so
we’ll need to ensure that all projects are sufficiently resourced to
realise their eventual benefits.
Our new ICT Strategy needs to balance expectations against costs and service
requirements, all within a constantly evolving environment. This is likely to prove a
tricky balancing act, but if we achieve it the business benefits should be self-evident.
Developing the Strategy
Our strategic approach to sweating our assets has put us slightly behind the
curve in respect of emerging technologies, but in practice that’s no bad thing. It gives
us the opportunity to learn lessons from others experiences, both good and not so
good, and allows us to consider procurement frameworks and potential partnerships
without the pain of being a “bleeding edge” pioneer. This does not mean we lag
behind in all areas – indeed, we have led several innovative solutions on behalf of the
Essex Online Partnership and we continue to do so where appropriate.
The Strategic side of this document has been extensively researched, and is
based on evolving best practice within our field of operations. This research includes
primary research through attendance at courses, seminars and supplier presentation
days, together with secondary research considering work done by other authorities
through our links with the Society of Information Technology Management
(SOCITM), the Local Chief Information Officer (CIO) Council and the Essex OnLine
Partnership (EOLP). The proposed ICT Strategy has been extrapolated from this
research and developed in line with Maldon District Councils specific strategic
requirements.
The second, more operationally focussed part of the Strategy has been
developed following individual discussions with service managers regarding their
current and future service requirements. Whilst their responses currently demonstrate
a fair degree of short-termism in their outlook, their requirements do generally link in
to the emerging strategic framework and the discussions showed a good level of
support for the outline plans defined within Part 1. It is anticipated that the clear
strategic vision outlined within the previous part will assist service managers in
developing a longer-term view of their service, whereupon detailed action plans for
future years can be developed.
Page 5 of 30
APPENDIX 3
Part 1 – Strategic Aims
Sourcing and Procurement Strategies
General
The first strategic decision we need to make is how we should source our IT
services. The last 20 years have seen a rise in the number of organisations choosing to
outsource their IT services to external providers. The arguments in favour of this can
be persuasive, with tales of cost savings through specialisation, access to a wide pool
of service experts and promises regarding future investments. Unfortunately the
experience is usually somewhat different with very few outsourcing contracts
delivering the benefits promised at the start, and organisations incurring additional
costs through intensive contract management.
The latter point in particular has been picked up by the Government Digital
Service ( GDS – a renowned and exemplar body ) as a major disincentive to total
outsourcing. They have identified the lack of an intelligent client ( ie: fully IT literate
contract manager ) as a major failing in most outsourcing contracts, and champion
bringing services back in-house where appropriate. There is currently a growing trend
for this which is hardly surprising given the current financial climate, as research
suggests that an in-house service should be up to 20% cheaper than an identical
outsourced one. This doesn’t mean everything should be brought in-house though. It
would be a brave ( foolish ? ) organisation that chose to write its own server operating
system, or desktop productivity suite. These types of software are now commoditised
to the point where it is far cheaper to buy off-the-shelf than it is to develop them inhouse, and there are many other equivalent scenarios.
A far more sensible approach lies in selective sourcing, which has been the
strategy adopted by Maldon District Council for many years now. Wherever possible
we purchase COTS ( Commercial Off The Shelf ) software packages, tailored to our
specific requirements as appropriate. From the service delivery perspective the
majority of functions are supported in house, but with external consultancy sourced
for complex or new activities. Where this becomes necessary we always ensure
sufficient knowledge transfer to the in-house team to eliminate our reliance on
external contractors if possible.
We are nor dogmatically tied to in-house service provision, preferring to base
our sourcing decisions on rational analysis regarding costs, benefits and capacities. In
several instances we have chosen to outsource service provision and support where
there are clear financial or operational benefits available to the Authority by so doing.
This balanced, selective sourcing strategy has served us well over the years and has
led to us benchmarking as one of the cheapest IT services within Essex. Selective
sourcing should therefore remain our preferred option, leading to the first strategic
principle :
S1
We will continue to work with both the Private and Public sectors to
procure the most cost effective solutions for our needs
Page 6 of 30
APPENDIX 3
Shared Services
Sharing services between Local Authorities is another area demonstrating
mixed outcomes. However, with the ever increasing financial pressures, more and
more authorities are considering shared services as a means of potentially spreading
the investment load. Research identifies a very wide range of shared sourcing models
and arrangement, but the one point all sources agree on is that a shared service IS
NOT outsourcing. If one authority simply buys services from another, or an
arrangement is set up with no shared risk and mutual benefit, then it is simply a
commercial relationship – not a shared service.
Most experts agree that sharing an ICT Service will not necessarily lead to
savings. It can however facilitate further shared service initiative, and can provide
resilience and capacity that a single authority may be unable to justify on its own. The
key to agreeing and implementing a successful shared service is a genuine willingness
to work in partnership with other organisations, and to make the necessary operational
changes and investments to support those changes. The emerging commercialism
within the Local Government market can actually be a major barrier to successful
shared services as authorities look to capitalise on internal strengths and create
income streams. Successful shared services remove the profit motive and rely instead
on mutual shared benefits, both financial and non-pecuniary.
Sharing services is not the panacea or golden bullet it is often billed as being,
but it can lead to considerable opportunity cost savings in terms of capacity and
resilience. Within Essex, this Council has participated in a shared service for over a
decade now through the Essex Online Partnership. This partnership consists of all
Local Authorities within Essex plus the Police and Fire services, and reports into the
Essex Association of Chief Executives. Membership of this partnership allows us
access to procurement frameworks which yield very substantial savings, but also
allow us to participate in shared infrastructure projects designed to lower costs across
the whole public sector in Essex.
EOLP continues to flourish, and it is highly likely that we will participate in
further shared infrastructure projects as time goes by. Indeed, we are currently leading
on an innovative identity assurance project that could lead to very substantial savings
for all partners. As with all relationships, what an organisation gets out of a
partnership such as this is largely dependent upon what it is prepared to put in, and it
is our intention to remain a very active partner for the foreseeable future.
S2
We will continue to work in partnership with public sector colleagues
through EOLP to identify and deliver projects of mutual benefit
S3
We will actively review opportunities for enhanced shared service
arrangements where it is clear there could be potential business benefits
in doing so.
Page 7 of 30
APPENDIX 3
Framework Agreements
Framework agreements provide a highly cost-effective means of procuring
goods and services. The Council has made substantial use of such agreements through
its membership of EOLP and through the Essex Procurement Hub leading to
significant cost savings. However, further opportunities are becoming available on a
National scale through the new Crown Commercial Services ( CCS ) organisation.
Similar National framework agreements were available under the old Government
Procurement Service, but internal market commercialisation coupled to poor central
government negotiation often meant that we could source products and services at a
substantially lower cost outside of the framework !
The CCS have now changed the emphasis on these commercial relationships
and have taken a much more pro-active negotiating position, focussing on UK-wide
public sector savings as opposed to internal market income generation. Whilst it is too
early to judge what impact this new approach will have, the EOLP Management
Group believe that active engagement with CCS may well give us leverage through
national economies of scale. This is particularly relevant for suppliers where costs of
change are extremely high ( Revenues and Benefits software, planning software etc. )
leading to a degree of cost complacency on suppliers parts.
S4
We will continue to leverage economies of scale through local and
national framework agreements where such initiatives benefit the Council
Channel Migration
It has been identified earlier in this document that we need to work smarter
rather than harder if we are to balance the conflicting needs of rising public
expectations with reducing financial resources to meet those expectations. This
section will explore some of the facts and myths surrounding on-line service
provision, and will seek to provide a framework that will help us to deliver services
that match both requirements.
Providing Council services is an expensive business, and demand for services
has been and will continue to increase as populations increase and age. The challenge
for service providers is how to meet this demand with dwindling budgets, and the
answer undoubtedly lies in greater self-service. However, if we’re going to encourage
our residents to change the way they interact with the authority we will also need to
change our own approach to service provision. This section examines our options for
doing so.
Improving the Customer Experience
Customer expectations have changed in recent years and are continuing to do
so. Whilst telephony used to be the preferred contact medium for most business
transactions, the rise in personal computing and especially mobile devices has led to a
propensity for doing things on-line. Indeed, research suggests that the website is now
Page 8 of 30
APPENDIX 3
the first point of call for the vast majority of enquiries, and this includes finding an
organisations telephone number ! Our clients expect to be able to access our services
over the internet at times that suit them and expect to be able to undertake their
transaction quickly and easily, without waiting for the offices to open and without
being asked to complete additional forms or paperwork. The technology now exists to
deliver against this expectation, and can deliver benefits not only to the client but also
to the organisation if it deployed correctly.
Statistics from Government suggest that over 82% of the UK population are
now online, with over 77% using the internet on a daily basis – and those statistics are
rising. With over half of the 1.9 million new users last year being “silver surfers” the
internet is no longer solely for the young, and has become the preferred access
channel for the vast majority of service consumers. The old arguments about the
elderly becoming disenfranchised through the move towards digital services no longer
hold water.
This change in behaviour presents significant implications and opportunities
for service development within the Council. If we can provide digital services that are
so good that people choose to use them we will not only meet our users expectations
but also provide the services they expect to receive at a radically reduced cost. Doing
this will require a process review of each and every on-line service to ensure that all
clients have enough information to fully complete their transaction and that all front
end systems are fully integrated with back end process to streamline the business
process and enhance the customers experience. Delivering this will require investment
in new technologies to an extent as explored in Part 2 of this Strategy, but the benefits
from such investment could be very significant.
Business Benefits
The financial benefits of the “Digital by Default” approach can be easily
demonstrated. It is generally accepted within Business Process Management circles
that the SOCITM survey of 2012 provides a realistic assessment of transaction costs
within Local Government, these being as follows :
Face to Face
Telephony
Internet
£8.62 per transaction
Research also suggests that over 50% of callers to a Councils Contact Centre will
have obtained the telephone number from the Councils website. If we can make our
on-line service offering so good that these clients choose to complete their
transactions on line rather than calling us, that equates to a saving of £2.68 per
transaction. To put this in perspective, the Contact Centre took 14200 calls in August
2014 and 14680 in September. If we assume 50% channel migration, that equates to a
potential annual saving of over £230,000 !
Clearly these figures are only indicative and may be reflected in capacity
creation rather than hard cash even if they are realised in full, but they do provide a
vivid example of the sorts of savings potentially available. However they also take no
account of the face-to-face transactions that might also be migrated onto our website,
Page 9 of 30
APPENDIX 3
and this, considered with the fact that most clients would choose to use this
transaction medium IF it were good enough, makes the arguments for adopting
“Digital by Default” highly compelling.
The business benefits are not purely financial though. Adopting an end-to-end
service delivery approach when designing new on-line services can have significant
business benefits for service management as well. Fully integrated workflows could
vastly reduce Officer data input requirements, and this reduction in back office
administration could in turn create greater capacity to focus on the more value adding
activities inherent in the job. Furthermore the reduction in front-office demand could
allow resources to be re-directed to other service areas if needs be.
Whilst it’s clearly not possible to deliver all services on-line there are very few
that can’t have a significant proportion of their business process presented in this way.
With a little bit of creative thought we should be able to encourage our service users
to undertake many activities themselves. Examples of this could include nuisance
monitoring, application processing and tracking, Officer appointment systems etc., all
of which may well involve some professional input at some stage but can largely be
dealt with by the client themselves at a time convenient to them. If we think a
business process through properly we can create organisational capacity by
encouraging our clients to undertake the non-value-adding activities inherent in a
process themselves, thus freeing professional Officer time to focus on the more taxing
elements of their job.
From the above we will adopt the following strategic principles :
CS1
We will adopt a Digital by Default approach to service delivery wherever
possible
CS2
We will review all business processes to help those residents that can do so
to help themselves.
Digital Inclusion
Whilst Digital by Default service delivery should be our aim, it is highly
unlikely that all of our service consumers will adapt to the new environments and new
ways of accessing services at once. We will need to ensure that no resident is
excluded as we move towards digital services, and to that end we will work with
service delivery partners across the public sector to encourage clients to develop
digital skills enabling them to take advantage of our services. A good example of this
lies in the proposed initiative our Housing team are developing in partnership with
various Housing Associations to encourage elderly and vulnerable people to improve
their access and use of internet and improve their quality of life, demonstrating that
for some of the most vulnerable people access to internet is a lifeline and not a barrier.
Within the Offices we can assist this sort of initiative by providing public access
terminals with mediated access for residents to make use of the new digital services.
Page 10 of 30
APPENDIX 3
CS3
We will work with partners to encourage take up of the new services, and
will offer mediated access to those unable or unwilling to make use of
online services
However, even with these initiatives there will remain a need to maintain
traditional service delivery channels for those clients who simply cannot adapt to
modern service delivery media. If we are to retain capacity to assist these clients we
need to encourage those that can help themselves to do so. From the previous
transactional analysis in this section it’s clear that Channel Migration may be the key
player in addressing the organisational challenges we face now and in the future - we
have to change, but it’s imperative that we take our service consumers along with us.
In many cases the convenience of 24/7/365 service availability coupled to high
quality information and a streamlined user experience will be enough of an incentive
to encourage our service consumers to make use of the new services. However, to
encourage maximum take-up we may need to offer incentives in the form of discounts
or other perceived customer benefits to encourage users to use the services.
Channel Migration is not just about encouraging take up though. We need to
change our internal culture as well, so that services see the digital channels as the
primary means of interaction with our residents and not just as a bolt-on activity to
their day job. We will encourage services to set annually incrementing targets not
only for deployment and delivery of on-line services, but also for resident take up of
those services to ensure that we do not simply automate existing processes and thus
discard the full potential benefits available to the organisation.
CS4
We will consider incentives and targets for the take up of on-line services
Managing Information
Information management has never been given a particularly high profile
within this authority, largely because of our relatively small size and extensive
reliance on paper records. The e-government programme together with other
initiatives such as the Transparency agenda, greater cross-organisational working and
enhanced data sharing and exchange protocols have meant that the volume of
electronic data stored by our organisation has grown exponentially. When these
technological changes are considered alongside the emerging national initiatives, it’s
highly likely that the next big challenges that the authority will face will come from
Open Data and other legislatively driven Information Management requirements.
Whilst our structured data management within individual system silos is very
good indeed, our current approach to managing unstructured information could
politely be described as “piecemeal” ! Unstructured data, both within services and
corporately, has evolved over the years with little thought and almost no governance.
As a result there are issues with currency, repetition, location and governance across
the whole of our unstructured data storage system. Data storage is clunky and difficult
to manage, information is hard to find and often difficult to test for currency and
Page 11 of 30
APPENDIX 3
security is complex and fragmented, all of which makes information management
highly resource intensive and, as a result, often absent.
It’s fair to say that Information Management has been an undervalued activity
within the Council to date and has therefore never been resourced. However, this new
IT Strategy provides the opportunity to address that shortcoming and to create a new,
well-designed, fully integrated storage structure that meets the needs of Members,
Residents and Staff now and for years to come. How precisely we will do this needs
to be researched and defined - although a potential solution is proposed in Part 2, it is
not the only option and alternative solutions to this problem may well present
themselves during the life of this strategy.
MI1
We will develop a structured approach to information management in
those areas currently deficient in this, and we will invest resources to
deliver this.
A key aspect to Managing Information lies in electronic document storage.
This should not be confused with electronic records management, although there are
often overlaps between the two. As with general information, electronic document
management can really be split into structured document management ( which
generally relates to case management of some description ) and unstructured
document management ( which relates to documents such as corporate policies etc.,
but will include elements of records management as well ).
The Councils Electronic Document Management System ( EDMS ) is quite
old now, but still provides a very good solution to our structured document
management needs. The product is integrated into most back-end systems and
provides workflow and work management capabilities as well as the standard legally
compliant EDMS functions. However, this has still not been fully adopted across the
authority, and a key activity during the life of this strategy should be addressing this
issue.
MI2
All services will develop implementation plans for EDMS using current
applications where possible for live deployment within the life of this
strategy.
Unfortunately the unstructured document management position is the same as
that for unstructured information, but due to the security issues surrounding document
access and revision, the position is actually considerably more complex. Reviewing
and resolving this situation will be both time consuming and costly, plus the
likelihood is that the evolution in document storage technologies seen in the last few
years will continue apace. The strategic decision is therefore whether we should invest
resources in resolving the legacy issues within legacy systems, or invest in
technologies and systems that will provide us with modern, accessible document
storage systems that will meet our future needs, and effectively migrate our existing
documents into these new data structures.
Page 12 of 30
APPENDIX 3
The latter course of action has the serendipitous benefit of allowing services to
review their current electronic documents for both currency and validity, and dispose
of those no longer required in line with our Document Retention policy. It will also
make searching and retrieving far easier, since modern document storage tools use
modern interfaces similar to those that our users utilise in their private lives. Other
benefits include :
•
•
•
Version control – coherent, structured and managed by the system
Intranet Replacement – access to documents and other content through
a more internet-styled Intranet
Internet replacement – over time we may be able to migrate away from
our current Content Management system saving both the software costs
and the service management overheads inherent in our current contract
Both Intranet and Internet solutions could reference core documents within this
architecture, thus eliminating confusion regarding currency or efficacy of published
data.
MI3
We will design and implement a new, cohesive data repository for all
unstructured data.
Streamlining Business Processes
This theme is inextricably linked to Channel Shift, but whilst the customer
benefits undoubtedly arise from better front-end services, the benefits to the Council
arise from streamlining our back-end processes to support front-end service delivery
mechanisms. We already have an excellent portfolio of products that can enable us to
deliver considerable service efficiencies for both internal and external transactions,
but these efficiencies will not be realised unless we are prepared to change the way we
work to leverage the investments in technologies.
SB1
Service managers will agree a programme of Business Process Reviews
with the Resources Directorate to encourage Channel Migration and
deliver service efficiencies.
Mobile Working
Mobile working is really a sub-set to this workstream – it is effectively part of
the internal Business Process Streamlining exercise – but the main difference is that
we have not yet invested in a corporate mobile working solution. The key business
advantage to mobile working technologies lies in the enablement of front-line officers
to deal with issues both planned and ad-hoc whilst out of the office. However, a
simple recording solution won’t deliver the significant business benefits that could be
delivered through a well thought out and constructed solution.
Page 13 of 30
APPENDIX 3
There are many caveats to deployment of a mobile solution in a predominantly
rural area, but these can be overcome with a bit of thought. For any mobile working
solution to justify its expenditure, it must deliver efficiencies within the business
process to which it is applied. It must provide the Officer with enough data to be able
to complete the job on-site, and must fully integrate with back-office systems in order
to realise process efficiencies through the elimination of repetitive data entry.
Wherever possible the mobile working process must be designed to remove requests
for additional information, or the need to request further data from the client. The
ultimate goal is to present both Client and Officer with a simplified, streamlined
business process that delivers the required outcome at the first point of contact.
Work has already started on reviewing candidate solution providers, with a
view to piloting mobile working within the Environmental Services team. This work
will continue, but any solution chosen must be suitable for corporate deployment
across the full range of services provided by the Council.
SB2
A Corporate Mobile Working solution will be sourced, and then deployed
on a phased basis across all Council activities that may benefit from
Mobile Working.
New Ways of Working
The advent of cloud technologies that finally meet Government security
standards offer opportunities for us to review our working practices, especially where
Members and Officers have specific corporate solution requirements. The time is now
right for us to review our current working practices in order to deliver more
appropriate and enabling solutions for the clients that need them.
There are also the first signs of movement within the overly restrictive central
Government requirements relating to Public Sector Network connectivity which have
hampered our desire to work in a more user friendly manner. We will continue to
work on a regional and National level to ensure that this welcome re-alignment of
security requirements and risk continues, and we will review and replace our
corporate policies together with elements of our corporate architecture in order to
simplify and enhance our service provision without jeopardising our excellent
national reputation concerning our Information Security and Compliance practices.
We will also continue to work with our partners, both Public and Private
sector at local, regional and national level to ensure that the solutions deployed by the
Council represent both best practice and best value in addressing our identified
business requirements.
SB3
We will review the corporate architecture supporting home working,
remote access and hot desking to ensure that it remains fit for purpose
during the life of this strategy.
Page 14 of 30
APPENDIX 3
Software and Systems Replacement
Increasing public IT literacy coupled to the speed of development for new
technologies will provide significant opportunities for efficiency gains. These can’t
necessarily be fully financially justified in pure business case terms since they are
often just a better way of doing things. A prime example lies in a Web-based member
support / Committee management system. Financially there could be savings through
a reduction in paper usage and improved operational efficiency, but these might be
difficult to realise in practice. However, from the client ( i.e. Member ) perspective
the benefits are likely to be highly significant, with access to documents, reports,
minutes and agendas available 24/7/365 without the need to sign on to the Councils
network. It’s difficult to argue that such a shift represents a better way of working, but
it may be equally difficult to justify the change in purely financial terms.
It’s highly likely that there will be multiple similar process improvement
opportunities that will manifest themselves during the life of this strategy, and we will
need to weigh up both the pecuniary and non-pecuniary benefits of adopting these
new technologies when making our investment decisions. To that end we will need to
re-form a governing body along the lines of the old Making our Future /
Transformation Board, as this, together with the Transformation fund, provides an
ideal mechanism for managing and assessing net worth of a project from both
financial and user experience perspectives.
SB4
We will leverage new technologies to enhance working practices and user
experiences wherever appropriate
This concludes Part 1 of this Strategy. Part 2 will seek to expand on this framework be
explaining how we intend to deliver against these aims in a coherent and joined up
manner.
Page 15 of 30
APPENDIX 3
Part 2 – Operational Delivery
There are two separate but integrated themes to Part 2 of this Strategy, these
being delivery of the strategic aims identified within Part 1 and delivery of the
operational service requirements derived from interviews with individual Service
Managers described within the introduction. It is anticipated that the next revision to
the operational plan will see service managers aligning their development
requirements with the workstreams identified in Part 1 to a much greater degree than
they currently are. Having said that, large parts of this strategy are evolutionary as
opposed to revolutionary leading to very considerable synergy even at this early stage.
Technical Architecture
The technical architecture currently in situ would be largely familiar to an IT
Professional of 20 years ago. Operating systems, hardware power and networking
have all made great leaps forward in that timeframe, but the basic principles on how
we manage ICT resources have remained fairly static.
Over the last few years technology has begun to change significantly.
However, as with most technological change the business benefits have been
significantly over-hyped, often resulting in poor user experiences and damaged
reputations relating to particular products and approaches. Suppliers have exacerbated
this by championing juvenile technologies as a means of opening new markets, with
often disastrous and expensive results.
These technologies are now far more mature, and are becoming the de-facto
architecture in many lines of business. They replicate ( or actually support in many
cases ! ) users private technological experiences and practices, and have become the
expected norm for many staff when joining an organisation. We have chosen to sweat
our assets to gain the maximum possible return from investment in technology and
keep our investment costs down, but we are now at a point where we need to consider
our whole technological architecture to bring it in line with modern expectations.
Notwithstanding Member, Officer and Resident expectations, we will need to
invest in our underpinning technical infrastructure if we’re going to deliver against the
strategic aims outlined in Part 1. Research and detailed consideration of organisational
needs has led to the following integrated model for our future technical architecture. It
should be stressed that although we are a bit behind the curve regarding these
technologies compared to the commercial sector, within the Local Government arena
we are in a comparable position to many other Local Authorities. It should also be
noted that neighbouring authorities are thinking along similar lines, and a few are
already implementing these technologies so we are not re-inventing the wheel here.
Page 16 of 30
APPENDIX 3
Fig. 1 – Consolidated Technical Architecture
This proposed model is built on the standard Microsoft application stack, and
as such should prove coherent and relatively simple to integrate. The model does not
show all technologies in use or proposed use, but rather seeks to provide a pictorial
representation of the desired destination for our technical architecture. The need for,
and role of, each element is considered in the following sections.
CRM ( Customer Relationship Management System )
This is potentially the most important element of our proposed strategy.
Officers have deliberated long and hard over the need for a CRM for many years now,
which means that we have fallen behind our peers with respect to a key piece of
corporate architecture.
CRM’s are often thought of as simply providing an organisation with a single
view of their customer. Of course this is key feature, but in fact a CRM provides an
organisation with a lot more than that. From our residents perspective, the CRM
should provide a portal into each and every interaction with the Council. Some
transactions require us to verify the identity of the client, and this in turn requires a
reliable identity management / verification system. We are currently leading on the
development of a potential pan-Essex solution in this respect (on behalf of the Essex
Online Partnership) which could provide free two factor authentication for each
resident / member / officer across Essex. Ultimately this could allow on-line access to
personal confidential data and irrefutable proof of identity for on-line transactions, but
as a Council we won’t be able to realise the full benefits from such as solution unless
we invest in a CRM.
Page 17 of 30
APPENDIX 3
The move towards CRM is a journey and not a defined destination, and as
such we need to look at any implementation strategically as opposed to viewing it as
an operational start-and-finish activity. As identified in Part 1, we need to work
smarter rather than harder, and re-engineering our business processes around customer
self service will help in that respect. To do this properly we need to have a CRM in
place.
A CRM can also help with capacity management, as workflows within the
system can pro-actively inform our clients of their transaction status thus avoiding the
service demands caused by clients chasing progress either over the telephone or by email. There’s little doubt that deployment of a CRM will ultimately lead to financial
savings, but only when it is deployed with a focussed customer-centric approach.
Consultants specialising in the deployment of such solutions recommend that
we start small and then grow – a common mistake is to try to do everything at once
which almost always results in either project failure or diminution of benefits. They
also point out that we will need to address our information governance and
management before a comprehensive CRM can be deployed, and that’s dealt with in
the next section.
Sharepoint
Sharepoint is really a group of products under a single banner, and provides a
potential solution to the myriad of unstructured data issues identified in part 1. Its
features go far beyond unstructured data management though, with the suite providing
intranet portals, document and file management, collaboration, social networks,
extranets, websites, enterprise search, and business intelligence. It also includes
system integration tools, process integration tools, and workflow automation
capabilities.
One of the most appealing aspects of Sharepoint is that it has been designed to
minimise reliance on IT Technical staff, with data owners taking direct responsibility
for the management of their information assets. By default, SharePoint has a
Microsoft Office-like interface and it is closely integrated with the Office suite, whilst
the web tools embedded in the product suite are also intended for non-technical users.
Sharepoint places greater responsibility and accountability with the
Information Asset Owner since it becomes their responsibility to update content,
define access permissions and to maintain the relevant document depositaries. This
fosters the adoption of good Information Security practices across the organisation,
since Information Asset Owners become directly responsible for the security of the
information they are supposed to be managing.
Apart from fostering a greater sense of information management responsibility
across the user base, Sharepoint also aims to remove the artificial silos created by
traditional Information Management practices and replace them with a more inclusive
philosophy – the different strands still remain but are not considered in their own
right;
Page 18 of 30
APPENDIX 3
Fig. 2 – Sharepoint approach to
Information Management
When considering individual information assets, Sharepoint seeks to blur the
traditional boundaries between internal and external information through treating
information assets as belonging to a series of continuums. It becomes the Data
Controller or Information Asset Owners responsibility to decide whereabouts on each
Information Management continuum their particular data asset should sit :
Fig. 3 – Sharepoint Continuums
Page 19 of 30
APPENDIX 3
As can be seen, this is a very significant project that cuts across the entire
organisation. Unfortunately many organisations have rushed into deploying the
product set without considering their information management requirements
beforehand, which has resulted in a good product getting a bad reputation. The issues
encountered seldom relate to functional deficiencies within the suite, but rather to
poor configuration, understanding and deployment of the product set within that
particular organisation. The mantra that if you can use Microsoft Windows, Office
and a web browser then you can use Sharepoint is true up to a point, but to roll the
suite out successfully across a complex organisation requires a considerable amount
of preparatory work.
Thankfully this is now a well-trodden path with considerable assistance
available on the web, through the market and indeed via other Local Authorities to
assist our migration. Indeed, we have already sourced a reasonably comprehensive
guide to the processes and pitfalls inherent in a corporate deployment which can be
used to build our own comprehensive project plan;
Fig. 4 – Model Sharepoint
Deployment Programme
©Metataxis, 2014
Nevertheless this remains a major challenge for us and represents potentially a
five year migration path. Research suggests we start with a small Proof of Concept
(PoC) deployment and then review whether or not we commit resources to a full-scale
implementation depending upon the outcomes of the trial. Should we decide to
proceed we will need to submit a bid for additional human resource for the life of the
project as although the PoC can be accommodated within existing resource, the largescale roll-out based on the procedure outlined in Figure 4 above cannot. The PoC will
be used to build the business case, and the required resource will be sought through
the normal budgetary process at the appropriate time.
Page 20 of 30
APPENDIX 3
Website
If we are to make our website the primary focus of service delivery, we will
need to make sure that it remains fit for purpose throughout the life of this strategy,
and also that it can fully integrate with the rest of our technical architecture. Our
current website runs on a commercial and proprietary Content Management System
(CMS) which is currently being upgraded. Periodic upgrades are an inevitable fact of
life in the IT World, but the cost of this particular one has been both unexpected and
substantial. This isn’t that much of an issue, but development of this new IT Strategy
gives us an opportunity to consider alternative CMS options.
A significant proportion of Sharepoint deployments make little use of the core
functionality and are actually undertaken for its excellent CMS and Website
capabilities. It would make sense for us to make use of these as well, especially
bearing in mind the desired medium term architecture detailed within Figure 1.
Following this route should give us seamless integration between our website, our
CRM and our back office systems thus streamlining business processes and
improving the customer experience.
Travelling this route is, however, dependant upon the outcomes of the PoC
detailed in the previous section. There is little point in deploying Sharepoint within
our environment for its CMS alone, so migration of our website onto Sharepoint is
depe4ndant upon successful completion of the PoC and agreement to proceed with
Sharepoint on a corporate basis, and successful piloting of Sharepoints embedded
Intranet / Internet features.
Should we decide not to proceed with Sharepoint, we should still consider our
alternatives regarding our web CMS. These include, but are not limited to, use of
freely available open source CMS like Drupal or Ruby on Rails, proprietary solutions
such as the one currently in place amongst others, and even total outsourcing of the
web function.
Telephony
Whilst we own the current telephony switch, it is getting quite old now. An
agreed capital bid for 2015 will allow us to bring the switch up to the minimum
acceptable operating standard (the software is significantly out of date, and we are
experiencing difficulties sourcing additional hardware for it), but we do really need to
review our strategic approach to telephony whilst modernising the rest of our
infrastructure. We have a few options in this respect, including replacement either
using on-site equipment or a virtual cloud-based solution, working in partnership with
other Local Authorities and using their facilities or outsourcing our telephony services
completely. However, before starting the evaluation it is useful to consider a very
recent announcement from Microsoft regarding their product portfolio.
In the model pictured at the start of this section we have included Microsoft
Lync , which is a Unified Communications platform / tool from Microsoft widely
deployed within neighbouring authorities. However, Microsoft have very recently
Page 21 of 30
APPENDIX 3
announced that Skype for Business will replace Lync in the early part of 2015, and
that it will now contain features of both products ( Skype and Lync ). Skype includes
tools such as videoconferencing and call management, so when this is combined with
Lync’s Unified Communications architecture Skype for Business becomes a highly
attractive proposition. Combine this with the fact that we are proposing an integrated
Microsoft Application stack across our corporate architecture, it really makes sense to
wait until this latest offering is proven before committing to any particular course of
action regarding telephony. We will therefore upgrade what we have for the time
being and undertake a formal review of Microsoft Skype for Business during the year
commencing April 2016, with a view to preparing a business case and budgetary
proposition for the 2017 budget cycle.
Service Projects
In addition to these corporate projects, services have assessed their current and
future IT requirements during the life of the strategy. Outputs are, at present, quite
short-term in their outlook but there is a high degree of synergy between Service
requirements and our Corporate Infrastructure proposals. This section will be used to
define the ICT Service workplan, although this will inevitably be an iterative exercise
with a high degree of flexibility required as service needs develop and change.
Once this strategy is adopted Service Managers will be asked to produce a
forward plan on how they intend to meet the Strategic Aims detailed within Part 1,
and these activities will again be built into the ICT Service Plan. Where activities
require additional resource, financial or human, proposals will be prepared and
submitted through the normal processes. Activities requiring Capital funding may be
funded through the Transformation or Efficiency funds if it’s not viable to follow the
normal budgetary cycle, subject of course to Business Case approval by the relevant
Members and Officers.
A full list of these service activities appears in Appendix A. These are subject
to the usual ICT Work Planning process whereby an allocated ICT Officer will
negotiate delivery timeframes with the relevant Service Managers to produce a
mutually agreeable workplan. It is again highly likely that this plan will fluctuate in
accordance with Service requirements and capacities, but it will at least form a
baseline against which we can monitor progress.
High level estimates for timescales and costs relating to the strategic themes
are detailed within the next part of the strategy.
Page 22 of 30
APPENDIX 3
Part 3 – Making it Happen
Programme Management
It’s important to realise that each strategic aim cannot be managed as a project.
The aims detailed within Part 1 are desired outcomes that will be realised through a
series of underlying activities. It’s these individual that can be managed as projects ,
all running within an overall strategic programme. Programme management therefore
needs to review the specific themes within that programme and NOT individual
projects. If the Programme Board focuses on individual projects then there is a
significant risk they will lose their strategic perspective and resort to project
micromanagement. This will waste scarce resources and frustrate Project Managers,
so it is essential that the Programme Board focusses on high-level strategic activities.
Individual projects on the other hand will require Project Managers from
across the organisation. These must not work in isolation, but must form project teams
with representatives from all stakeholder groups, with IT representation at each and
every Project Team meeting. The projects must be managed in accordance with the
Councils approved Project Management Methodology, and regular updates should be
provided to the relevant Programme Manager who will update the programme board
accordingly. This should be on a simple RAG basis, with a positive focus on delivery
and issue resolution wherever possible.
A detailed delivery programme can’t be firmly defined until the Strategy has
been formally adopted. However, the following table provides a potential high level
programme for key themes that can be worked up into formal project plans once this
has happened.
Page 23 of 30
APPENDIX 3
Project
Provisional Timescales
Finance Requirements
Funding
Source
NB – educated guesswork
Sharepoint
Purchase / install software & develop PoC in one
service area
Produce business case if PoC successful
Recruit dedicated Sharepoint resource
Develop corporate roll out plan
Commence data migration / user training / etc
Review Website CMS options
Migrate Website ( if appropriate )
Complete initial Sharepoint deployment
CRM ( based on Microsoft Dynamics )
Review Basildon / Newham experience
Produce Business Case & prepare Capital /
Revenue bid
Decide in-House or Hosted
Procure Software / Hosting
Fixed-term appointment or external consultants
Pilot / Proof of Concept deployment
Gateway review for Corporate Roll-out
Prepare corporate deployment plan
Phased Corporate Roll-out
Telephony
Review suitability of Skype for Business
Prepare bid for Telephony options
Project Manage Telephony replacement
April / September 2015
October 2015 / December 2015
February 2016 / May 2016
April 2016 / September 2016
September 2016 / April 2019
April 2017 / March 2017
April 2018 / March 2019
April 2019
Sharepoint Servers and PoC
CALs £10,000
Transformation Fund Bid 2015/16
£32,000 pa fixed term
Dependant on above
Additional Licenses £15,000
Possible Consultancy
Requirement £25,000
Revenue Growth bid for 2016/17
January 2016
April 2016
April 2016
May / September 2016
October 2016
October / December 2016
January 2016 to April 2019
All costs depend on option
chosen. Not all identified
casts will be needed. Hosted
solution will be annual
recurring. In-House may
require consultancy and
support for a fixed period.
Software / Hardware – POC
£8,000
Software / Hardware Live
£20,000
Fixed term support resource
- £40,000 pa
External Consultancy £25,000
April 2016 / October 2016
October 2016 / December 2016
April 2017 / April 2018
Completely dependant on
solution. Likely to consist of
both Capital and Revenue
September / October 2015
October / December 2015
Page 24 of 30
Capital Bid for 2017/18
Capital / Revenue Growth bids
2016/17
Revenue Growth Bid for 2017/18
APPENDIX 3
elements. Unable to obtain
prices at time of writing as
suite has not yet been
released.
Mobile Working
Review available product options
Prepare Business Case for CLT approval
Secure Funding
Deploy pilot in Environment Services
Deploy corporately as appropriate
Cloud-based Committee Management
Review market for potential suppliers
Prepare outline functional specification
Member / Officer working group to review
products ( on site demo’s as part of procurement )
Procure solution
Train Officers in back-end functionality
Train new administration in product features and
new hardware ( i-pads )
Go Live
Comino Activities ( EDMS )
Work programme to be determined with Service
Managers
Delivery according to plan
e-Forms and Integration
Work programme to be determined with Service
Managers
Delivery according to plan
Remote Access / Personal Device Use
Review of current Network Architecture
Deployment of Ericom Access Now & Gateway
Underway / September 2015
Underway / September 2015
September 2015
October 2015
January 2016 / April 2019
£34,000 year 1, £12,000 pa
after. May be possible to
secure cheaper alternative,
but none identified so far
34K Transformation or Efficiency
fund bid during 2015/16
12K growth bid for 2016/17 onwards
£20,000 Capital
£4,500 Revenue from Year
2
Transformation Fund Bid 2015/16
Revenue Growth bid 2016 / 17
February 2015
February 2015
March 2015 / April 2015
April 2015
April 2015
May 2015
May 2015 / June 2015
Within existing resources
May 2015 / April 16
May 2015 / April 2016
September 2015 / October 2015
June 2015 / September 2015
Page 25 of 30
Within existing resources
APPENDIX 3
Deployment of EOLP Token solution ( if
approved )
Review of Good Technologies direct access
Products
Capital / Revenue bids if appropriate
Deployment of Good Access products
e-Mail upgrade / Replacement ( eol 4/11/17 )
Review options and upgrade paths
Prepare Revenue / Capital bid as appropriate
Commence Migration
Deadline for Live operation on new platform
June 2015 / July 2015
Funded by EOLP subscription
August 2015 / October 2015
Within existing budgets
October 2015
April 2016 / April 2017
April 16 / October 16
October 2016
April 17
November 17
Depends on solution chosen.
Hosted or Shared service
will be annual Revenue –
est. at £21,000 pa. ongoing
In-House will be Capital est
at £50,000
Page 26 of 30
Capital / Revenue Growth bids
2017/18
APPENDIX 3
Conclusion
This Strategy represents a step change in our approach towards Information
Management within the Council. It has been designed to reflect current best practice,
and to begin to steer our focus away from the underpinning technologies and towards
the way that we make use of one of our greatest assets – our people be they Residents,
Members or Staff. However, in order to do this we need to invest in modern enabling
technologies, and we need to ensure that we take all our stakeholders along with us on
this journey towards the future.
Fundamental change such as this cannot happen overnight encompassing as it
does significant technological and cultural challenges, but change we must if we are
to flourish as an organisation and, more importantly, provide the sort of services
expected by our taxpayers in the current day and age.
There is little doubt that timescales within this document are ambitious, but
even then the rate of technological advancement means that we should be prepared to
review our plans at any point should a better opportunity arise. As with all
technological plans, the key to success lies in remaining flexible and agile enough to
leverage technological opportunities for the ultimate benefit of the Residents we
serve.
Page 27 of 30
APPENDIX 3
Appendix A
Service Defined
Activities
Page 28 of 30
APPENDIX 3
Theme
Area
Activity
Planned / anticipated
start year
16/17
17/18
18/19
15/16
19/20
Strategic
Theme
Mobile Working
Waste
Env / License
Facilities
Finance
Mobile Working
Mobile working
Mobile working
Working from home possibilities
1
1
2
3
SB2
SB2
SB2
SB3
Comino Activities
Democratic
Finance
Waste
Housing / Customer Services
Env / License
Env / License
Planning DC
FoI process
Comino - scanning of invoices
Comino implementation
Comino for Housing (DFGS)
Comino EDMS with working links to Uniform
Streamline indexing - issues with document types
Review of Planning Process Map - Priority 3
Review business cases for comino in housing
1
1
1
1
1
1
1
2
MI2
MI2
MI2
MI2
MI2
MI2
MI2
MI2
e-Forms / BPR / Integration
Finance
Planning DC
Housing
Planning DC
Planning DC
Housing / Cust Servs
Planning DC
Housing
Use of e-forms & automated processes
e-forms on PSIP
dfg e-form
Enforcement BPR and Process Maps ( Priority 1 )
Consultation - Priority 2 - Internal first, then external
Expand number of Internal e-forms (To reduce avoidable contact)
S106 / CIL Officer / Processes
on-line services - forms
1
1
1
1
1
1
1
2
CS1
CS1
CS1
CS1
CS1
CS1
CS1
CS1
Office moves
Facilities
Facilities
Facilities
Facilities
Audit
Additional Telephone boards within building (St Cedds project)
Internal office moves (completion of St Cedds project)
St Cedds users move
Refurbishment of Council Chamber and Training Rooms
Hot Desking ( facilities & office moves )
1
1
1
1
1
S1
S1
S1
SB4
SB3
Website upgrade / development
Leisure - Country
Housing
Customer Serv
Tourism Galaxy / Website development
Website Upgrade
Website Upgrade
1
1
1
Corporate Infrastructure
Leisure - Country
Planning DC
Facilities
IT
Improvements to network at TIC and Parks Depot
Sharepoint for Policy
Review of MFD and printer usage
Review of Network Architecture to support BYOD access
2
1
1
1
Uniform development / Forms (requires project plan and clearer scope)
Waste evaluation / migration ( back onto Uniform )
Uniform Enterprise
Public Access
GIS deployment / training within DC
De-couple env health from Waste and Street Scene - access rights
Maintain Uniform modules currency - make sure that what we've got is up
to date.
Uniform (may need to allow new fields for monitoring purposes)
decoupling eh and waste / street scene
better integration into community services - rangers / car parks etc. etc.
1
1
1
1
1
1
1
1
1
1
SB1
Banking re-tender
PCI Compliance
Completion of the IER implementation
Review and Implementation of updated Committee Services software
Mulitple DD dates
Alternatives to telephone payments (may not require IT solution)
Procurement and any implementation of Essex data matching solution
Implementing an NDR validating/taxbase maximisation solution
Large file sizes - system to deal with
GIS mapping (publication of the Proposals Map online)
Snap into service areas ? License details.
Mulitple DD dates
Alternatives to telephone payments (may not require IT solution)
Data sharing for large files (ftp?)
Public consultations (may need to make it easier for people to respond via
our website, may also need to create more report from uniform)
1
1
1
3
1
1
1
1
1
1
1
1
1
2
2
S1
Possibility of audit management system
Alternatives to Ten
Fraud - use NFI.
Chelmsford have bid for an Essex-wide collaborative Fraud set up.
QR codes - software ? Stickers ? In house or outsourced ?
Development of Member area on the intranet
change desktops to laptops for committee services
extra monitor for new member of staff
Change to set up of telephone system (routing calls to individual teams)
3
3
3
3
3
3
3
3
3
Uniform projects
Leisure - Country
Waste
Planning DC
Planning DC
Planning DC
Env / License
Env / License
Planning Policy
Waste
Waste
Uncategorised Projects
Finance
Fin/IT
Demo Serv
Demo Serv
Housing
Housing
Planning DC
Planning Policy
Planning Policy
Customer Serv
Customer Serv
Planning Policy
Planning Policy
Audit
Audit
Audit
Audit
Leisure - Country
Demo Serv
Demo Serv
Demo Serv
1
CS1
CS1
CS1
S1
MI3
S1
SB3
2
1
1
C1
SB1
SB4
C1
SB4
SB4
SB4
2
2
SB4
SB4
SB4
SB4
S2
SB4
C2
C1
C1
SB4
SB4
C1
C1
SB4
SB4
S2
S3
SB4
SB4
SB4
SB1
Page 29 of 30
APPENDIX 3
Theme
Area
Activity
15/16
Planned / anticipated
start year
16/17
17/18
18/19
19/20
Strategic
Theme
Future Year Projects
Facilities
Planning DC
Housing
Facilities
Facilities
Facilities
Facilities
Finance
Customer Serv
Finance
Finance
Audit
Leisure - Country
Leisure - Country
Leisure - Country
Housing
Housing
Customer Serv
Facilities
Finance
Leisure - Country
Planning Policy
Planning Policy
Finance
Finance
Env / License
Env / License
Env / License
Planning Policy
Planning Policy
Planning Policy
Planning Policy
Planning Policy
Planning Policy
Planning Policy
Outsourcing additional document production (daily mailings/batches e.g.
Comino for rest of Housing
Deployment of MFD solutions
mobile working pilot.
Wi-Fi Public access (subject to DWP funding)
New phone system
Shared accommodation with Essex Police
Paperless Planning department
Enhanced building wireless LAN access ( PSN Compliant )
Sage Reporting - web reporting tool ?
Wi-Fi Public access (subject to DWP funding)
Comino - back scanning of invoices
Banking reconciliation - review based on tender exercise
Case Management system ( as part of corporate project )
Mobile working for parks team
Potential vehicle tracking project
Comino-ing of cemetery information and records
E forms for all email enquiries (no longer able to free text)
Improve self service offer (Enhanced FAQ by keyword)
Homeworking/ mobile working
Older person housing / support options
E forms for all email enquiries (no longer able to free text)
CRM
Hot Desking areas
Review of payroll system - ?? bolt on to HR system
on-line booking system for sports pitchs and 'box office' function at TIC
Video conferecing
Review shared data options / filing options within Policy team
Review of financial system options
Review of P2P options
Implement alternatives to Academy (following Universal Credit roll out)
Self service
Channel shift
Apps
Bar-coding/OCR for bill/lcts matching
data cleanse for achieving clean mail postage savings
Improvement to remote access (speed and reliability)
Remote access to email and calender from personal mobile / PC / laptop
Team / cooperate tablet (for site monitoring and public consultation)
Laptop for all officers (to allow hot desking and home working)
Interal messaging system (not email)
Upgrade monitors
Planning - refresh of policies and practices.
3
1
1
2
2
2
3
3
2
3
2
2
3
3
2
3
3
3
3
3
3
3
3
3
1
3
3
2
3
3
3
3
MI2
SB4
SB2
C2
SB4
S3
SB1
SB3
SB4
C2
MI2
SB1
SB4
SB2
SB4
MI2
C1
C2
SB2
C2
C1
SB4
SB3
SB4
C1
SB4
MI1
SB4
SB4
3 SB4
C1
C All
C2
SB1
SB3
SB3
SB3
SB3
MI1
Page 30 of 30
APPENDIX 4
Treasury Management Strategy Statement and Annual Investment
Strategy 2015/16
1
Introduction
1.1
The Chartered Institute of Public Finance and Accountancy’s (CIPFA) Code of Practice for
Treasury Management in Public Services: Code of Practice 2011 Edition (the “CIPFA TM Code”)
and the Prudential Code require local authorities to determine the Treasury Management
Strategy Statement (TMSS) and Prudential Indicators (PIs) on an annual basis. In addition, the
Department for Communities and Local Government (CLG) issued revised Guidance on Local
Council Investments in March 2010 that requires the Council to approve an investment strategy
before the start of each financial year. This report fulfils the Council’s legal obligation under
the Local Government Act 2003 to have regard to both the CIPFA Code and the CLG Guidance.
1.2
The Council has invested substantial sums of money and is therefore exposed to financial risks
including the loss of invested funds and the revenue effect of changing interest rates. The
successful identification, monitoring and control of risk are therefore central to the Council’s
treasury management strategy.
2
External Context
2.1
2.1.1
Economic background
There is momentum in the UK economy, with a continued period of growth through
domestically-driven activity and strong household consumption. There are signs that growth is
becoming more balanced. The greater contribution from business investment should support
continued, albeit slower, expansion of GDP. However, inflationary pressure is currently
extremely benign and is likely to remain low in the short-term. There have been large falls in
unemployment but levels of part-time working, self-employment and underemployment are
significant and nominal earnings growth remains weak and below inflation.
2.1.2
The MPC's focus is on both the degree of spare capacity in the economy and the rate at which
this will be used up, factors prompting some debate on the Committee. Despite two MPC
members having voted for an increase of 0.25% in rates at each of the meetings between
August and December 2014, the minutes of the January 2015 meeting showed unanimity in
maintaining the Bank Rate of 0.5% as there was sufficient risk that low inflation could become
entrenched and the MPC became more concerned about the economic outlook.
2.2
2.2.1
Credit outlook
The transposition of two European Union directives into UK legislation in the coming months
will place the burden of rescuing failing EU banks disproportionately onto unsecured local
Council investors. The Bank Recovery and Resolution Directive promotes the interests of
individual and small businesses covered by the Financial Services Compensation Scheme and
similar European schemes, while the recast Deposit Guarantee Schemes Directive includes
large companies into these schemes. The combined effect of these two changes is to leave
public authorities and financial organisations (including pension funds) as the only senior
creditors likely to incur losses in a failing bank after July 2015.
2.2.2
The continued global economic recovery has led to a general improvement in credit conditions
since last year. This is evidenced by a fall in the credit default swap spreads of banks and
companies around the world. However, due to the above legislative changes, the credit risk
Version 2 (Feb 15)
1
APPENDIX 4
associated with making unsecured bank deposits will increase relative to the risk of other
investment options available to the Council.
2.3
2.3.1
Interest rate forecast
The Council’s treasury management advisor Arlingclose forecasts the first rise in official
interest rates in August 2015 and a gradual pace of increases thereafter, with the average for
2015/16 being around 0.75%. Arlingclose believes the normalised level of the Bank Rate postcrisis to range between 2.5% and 3.5%. The risk to the upside (i.e. interest rates being higher)
is weighted more towards the end of the forecast horizon. On the downside, Eurozone
weakness and the threat of deflation have increased the risks to the durability of UK growth. If
the negative indicators from the Eurozone become more entrenched, the Bank of England will
likely defer rate rises to later in the year. Arlingclose projects gilt yields on an upward path in
the medium term, taking the forecast average 10 year PWLB loan rate for 2015/16 to 2.7%.
2.3.2
A more detailed economic and interest rate forecast provided by the Arlingclose is attached at
Appendix A.
2.3.3
For the purpose of setting the budget, it has been assumed that new investments will be made
at an average rate of 0.5%.
3
Local Context
3.1
As at 31 December 2014 the Council has £0 of borrowing and £17.5m of investments. This is set
out in further detail at Appendix B. Forecast changes in these sums are shown in the balance
sheet analysis in table 1 below.
Table 1: Balance Sheet Summary and Forecast
31.3.14
Actual
£m
General Fund CFR
31.3.15
Estimate
£m
31.3.16
Estimate
£m
31.3.17
Estimate
£m
31.3.18
Estimate
£m
0.10
0.07
0.03
0
0
(0.10)
(0.07)
(0.03)
0
0
Borrowing CFR
0
0
0
0
0
Less: External borrowing
0
0
0
0
0
Internal borrowing
0
0
0
0
0
(11.65)
(11.48)
(8.34)
(7.14)
(6.51)
3.39
0.69
0.47
0.44
8.09
7.65
6.67
6.06
Less: Other debt liabilities *
Less: Usable reserves
Less: Working capital
Investments (or New borrowing)
11.65
* finance leases that form part of the Council’s debt (these represent embedded leases within
contracts that under accounting standards are classed as finance leases)
3.2
The Council is currently debt free and its capital expenditure plans do not currently imply any
need to borrow over the forecast period. Investments are forecast to fall to £6m as capital
receipts are used to finance capital expenditure and reserves are used to finance the revenue
budget.
Version 2 (Feb 15)
2
APPENDIX 4
3.3
CIPFA’s Prudential Code for Capital Finance in Local Authorities recommends that the
Council’s total debt should be lower than its highest forecast CFR over the next three years.
Table 1 shows that the Council expects to comply with this recommendation during 2015/16.
4
Borrowing Strategy
4.1
The Council currently holds £0 of loans; this has been the case since the Housing Stock Transfer
in March 1995. There is no immediate requirement to borrow; the Council may however
borrow to pre-fund future years’ requirements or unexpected capital expenditure that occurs
in the year, providing this does not exceed the authorised limit for borrowing of £10 million.
4.2
4.2.1
Objectives
The Council’s chief objective when borrowing money is to strike an appropriately low risk
balance between securing low interest costs and achieving cost certainty over the period for
which funds are required. The flexibility to renegotiate loans should the Council’s long-term
plans change is a secondary objective.
4.3
4.3.1
Strategy
Given the significant cuts to public expenditure and in particular to local government funding,
the Council’s borrowing strategy will address the key issue of affordability without
compromising the longer-term stability of the debt portfolio. With short-term interest rates
currently much lower than long-term rates, it is likely to be more cost effective in the shortterm to either use internal resources, or to borrow short-term loans instead.
4.3.2
By doing so, the Council will be able to reduce net borrowing costs (despite foregone
investment income) and reduce overall treasury risk. The benefits of internal borrowing will be
monitored regularly against the potential for incurring additional costs by deferring borrowing
into future years when long-term borrowing rates are forecast to rise. Arlingclose will assist
the Council with this ‘cost of carry’ and breakeven analysis. Its output may determine whether
the Council borrows additional sums at long-term fixed rates in 2015/16 with a view to keeping
future interest costs low, even if this causes additional cost in the short-term.
4.3.3
In addition, the Council may borrow short-term loans (normally for up to one month) to cover
unexpected cash flow shortages.
4.4
4.4.1
Sources
The approved sources of long-term and short-term borrowing are:
• Public Works Loan Board (PWLB)and its successor body;
• Any institution approved for investments (see below);
• Any other bank or building society authorised to operate in the UK;
• UK public and private sector pension funds (except the Essex Pension Fund);
• Capital market bond investors;
• Local Capital Finance Company and other special purpose companies created to
enable local Council bond issues.
4.4.2
In addition, capital finance may be raised by the following methods that are not borrowing, but
may be classed as other debt liabilities:
• Operating and finance leases;
• Hire purchase;
• Private Finance Initiative
• Sale and leaseback
Version 2 (Feb 15)
3
APPENDIX 4
4.4.3
The Council may consider sourcing its long-term borrowing from the PWLB but it will also
investigate other sources of finance, such as local authority loans and bank loans, which may
be available at more favourable rates.
4.5
4.5.1
Short-term and Variable Rate loans
These loans leave the Council exposed to the risk of short-term interest rate rises and are
therefore subject to the limit on the net exposure to variable interest rates in the treasury
management indicators below.
5
Investment Strategy
5.1
The Council holds invested funds, representing income received in advance of expenditure plus
balances and reserves held. During the current financial year, the Council’s investment
balance has ranged between £12m and £20 million, and similar levels are expected to be
maintained in the forthcoming year.
5.2
5.2.1
Objectives
Both the CIPFA Code and the CLG Guidance require the Council to invest its funds prudently,
and to have regard to the security and liquidity of its investments before seeking the highest
rate of return, or yield. The Council’s objective when investing money is to strike an
appropriate balance between risk and return, minimising the risk of incurring losses from
defaults and the risk receiving unsuitably low investment income.
5.3
5.3.1
Strategy
Given the increasing risk and continued low returns from short-term unsecured bank
investments, the Council will continue to diversify into more secure and/or higher yielding
asset classes during 2015/16. All of the Authorities surplus cash is currently invested in shortterm unsecured bank deposits, certificates of deposit and money market funds.
5.4
5.4.1
Approved Counterparties
The Council may invest its surplus funds with any of the counterparty types in table 2 below,
subject to the cash limits (per counterparty) and the time limits shown.
Table 2: Approved Investment Counterparties and Limits
Credit
Rating
Banks
Unsecured
Banks secured
UK Govt
n/a
n/a
£1m
5 years
£1m
5 years
£1m
4 years
£1m
3 years
£1m
2 years
Banks
Unsecured
AAA
AA+
AA
AAA+
Credit
Rating
Version 2 (Feb 15)
Government
Corporates
Registered
Providers
n/a
n/a
£2m
20 years
£2m
10 years
£2m
5 years
£2m
4 years
£2m
3 years
£ Unlimited
50 years
£2m
50 years
£2m
25 years
£2m
15 years
£2m
10 years
£1m
5 years
£1m
20 years
£1m
10 years
£1m
5 years
£1m
4 years
£1m
3 years
Banks secured
Government
Corporates
£1m
20 years
£1m
10 years
£1m
10 years
£1m
10 years
£1m
5 years
Registered
Providers
4
APPENDIX 4
A
ABBB+
BBB or
BBBNone
£1m
13 months
£1m
6 months
£1m
100 days
£1m
next day only
£1m
6 months
£2m
2 years
£2m
13 months
£1m
6 months
£1m
100 days
n/a
£1m
5 years
£1m
5 years
£1m
2 years
£1m
2 years
£1m
13 months
£1m
6 months
£1m
5 years
£1m
5 years
£1m
2 years
n/a
n/a
n/a
£1m
25 years
£50,000
5 years
£1m
5 years
Money
Market &
£3m per fund or 10% of fund size, whichever is lower
other
Pooled
funds
This table must be read in conjunction with the notes below
5.4.2
Credit Rating: Investment decisions are made by reference to the lowest published long-term
credit rating from Fitch, Moody’s or Standard & Poor’s. Where available, the credit rating
relevant to the specific investment or class of investment is used, otherwise the counterparty
credit rating is used.
5.4.3
Banks Unsecured: Accounts, deposits, certificates of deposit and senior unsecured bonds with
banks and building societies, other than multilateral development banks. These investments
are subject to the risk of credit loss via a bail-in should the regulator determine that the bank
is failing or likely to fail. Unsecured investment with banks rated BBB or BBB- are restricted to
overnight deposits at the Council’s current account bank Nat West.
5.4.4
Banks Secured: Covered bonds, reverse repurchase agreements and other collateralised
arrangements with banks and building societies. These investments are secured on the bank’s
assets, which limits the potential losses in the unlikely event of insolvency, and means that
they are exempt from bail-in. Where there is no investment specific credit rating, but the
collateral upon which the investment is secured has a credit rating, the highest of the
collateral credit rating and the counterparty credit rating will be used to determine cash and
time limits. The combined secured and unsecured investments in any one bank will not exceed
the cash limit for secured investments.
5.4.5
Government: Loans, bonds and bills issued or guaranteed by national governments, regional
and local authorities and multilateral development banks. These investments are not subject
to bail-in, and there is an insignificant risk of insolvency. Investments with the UK Central
Government may be made in unlimited amounts for up to 50 years.
5.4.6
Corporates: Loans, bonds and commercial paper issued by companies other than banks and
registered providers. These investments are not subject to bail-in, but are exposed to the risk
of the company going insolvent. Loans to unrated companies will only be made as part of a
diversified pool in order to spread the risk widely.
5.4.7
Registered Providers: Loans and bonds issued by, guaranteed by or secured on the assets of
Registered Providers of Social Housing, formerly known as Housing Associations. These bodies
are tightly regulated by the Homes and Communities Agency and, as providers of public
services they retain a high likelihood of receiving government support if needed.
Version 2 (Feb 15)
5
APPENDIX 4
5.4.8
Pooled Funds: Shares in diversified investment vehicles consisting of the any of the above
investment types, plus equity shares and property. These funds have the advantage of
providing wide diversification of investment risks, coupled with the services of a professional
fund manager in return for a fee. Money Market Funds that offer same-day liquidity and aim
for a constant net asset value will be used as an alternative to instant access bank accounts,
while pooled funds whose value changes with market prices and/or have a notice period will
be used for longer investment periods.
5.4.9
Bond, equity and property funds offer enhanced returns over the longer term, but are more
volatile in the short term. These allow the Council to diversify into asset classes other than
cash without the need to own and manage the underlying investments. Because these funds
have no defined maturity date, but are available for withdrawal after a notice period, their
performance and continued suitability in meeting the Council’s investment objectives will be
monitored regularly.
5.5
5.5.1
Risk Assessment and Credit Ratings
Credit ratings are obtained and monitored by the Council’s treasury advisers, who will notify
changes in ratings as they occur. Where an entity has its credit rating downgraded so that it
fails to meet the approved investment criteria then:
• No new investments will be made,
• Any existing investments that can be recalled or sold at no cost will be, and
• Full consideration will be given to the recall or sale of all other existing
investments with the affected counterparty.
5.5.2
Where a credit rating agency announces that a credit rating is on review for possible
downgrade (also known as “rating watch negative” or “credit watch negative”) so that it may
fall below the approved rating criteria, then only investments that can be withdrawn on the
next working day will be made with that organisation until the outcome of the review is
announced. This policy will not apply to negative outlooks, which indicate a long-term
direction of travel rather than an imminent change of rating.
5.6
5.6.1
Other Information on the Security of Investments
The Council understands that credit ratings are good, but not perfect, predictors of investment
default. Full regard will therefore be given to other available information on the credit quality
of the organisations in which it invests, including credit default swap prices, financial
statements, information on potential government support and reports in the quality financial
press. No investments will be made with an organisation if there are substantive doubts about
its credit quality, even though it may meet the credit rating criteria.
5.6.2
When deteriorating financial market conditions affect the creditworthiness of all organisations,
as happened in 2008 and 2011, this is not generally reflected in credit ratings, but can be seen
in other market measures. In these circumstances, the Council will restrict its investments to
those organisations of higher credit quality and reduce the maximum duration of its
investments to maintain the required level of security. The extent of these restrictions will be
in line with prevailing financial market conditions. If these restrictions mean that insufficient
commercial organisations of high credit quality are available to invest the Council’s cash
balances, then the surplus will be deposited with the UK Government, via the Debt
Management Office or invested in government treasury bills for example, or with other local
authorities. This will cause a reduction in the level of investment income earned, but will
protect the principal sum invested.
Version 2 (Feb 15)
6
APPENDIX 4
5.7
5.7.1
Specified Investments
The CLG Guidance defines specified investments as those:
• Denominated in pound sterling,
• Due to be repaid within 12 months of arrangement,
• Not defined as capital expenditure by legislation, and
• Invested with one of:
o The UK Government
o A UK local council, parish council or community council, or
o A body or investment scheme of “high credit quality”.
5.7.2
The Council defines “high credit quality” organisations and securities as those having a credit
rating of [A-] or higher that are domiciled in the UK or a foreign country with a sovereign
rating of [AA+] or higher. For money market funds and other pooled funds “high credit quality”
is defined as those having a credit rating of [A-] or higher.
5.8
5.8.1
Non-specified Investments
Any investment not meeting the definition of a specified investment is classed as nonspecified. The Council does not intend to make any investments denominated in foreign
currencies, nor any that are defined as capital expenditure by legislation, such as company
shares. Non-specified investments will therefore be limited to long-term investments, i.e.
those that are due to mature 12 months or longer from the date of arrangement, and
investments with bodies and schemes not meeting the definition on high credit quality. Limits
on non-specified investments are shown in table 3 below.
Table 3: Non-Specified Investment Limits
Cash limit
Total long-term investments (i.e over 364 days)
Total investments without credit ratings or rated below BBB
Total investments with institutions domiciled in foreign countries rated
below AA+
Total non-specified investments
£5m
£7.5m *
£0m
£12.5m
* To accommodate pooled funds which are not credit rated (e.g. strategic bond funds, equity income funds and property funds)
but in which the underlying investments are very highly diversified.
5.9
5.9.1
Investment Limits
The Council’s usable reserves available to cover investment losses are forecast to be £8.1
million on 31st March 2015. In order that no more than 25% of available reserves will be put at
risk in the case of a single default, the maximum that will be lent to any one organisation
(other than the UK Government) will be £2million. A group of banks under the same ownership
will be treated as a single organisation for limit purposes. Limits will also be placed on fund
managers, investments in brokers’ nominee accounts, foreign countries and industry sectors as
below:
Table 4: Investment Limits
Cash limit
Any single organisation, except the UK Central Government
£2m each
UK Central Government
unlimited
Any group of organisations under the same ownership
Version 2 (Feb 15)
£2m per group
7
APPENDIX 4
Any group of pooled funds under the same management
£3m per manager
Negotiable instruments held in a broker’s nominee account
£10m per broker
Registered Providers
£2m in total
Unsecured investments with Building Societies
£5m in total
Loans to unrated corporates
£1m in total
Money Market Funds
£12m in total
5.10 Liquidity Management
5.10.1 The Council uses in house cash flow forecasting methods to determine the maximum period for
which funds may prudently be committed. The forecast is compiled on a pessimistic basis,
with receipts under-estimated and payments over-estimated to minimise the risk of the
Council being forced to borrow on unfavourable terms to meet its financial commitments.
Limits on long-term investments are set by reference to the Council’s medium term financial
plan and cash flow forecast.
6
Treasury Management Indicators
6.1
The Council measures and manages its exposures to treasury management risks using the
following indicators.
6.2
Security: The Council has adopted a voluntary measure of its exposure to credit risk by
monitoring the value-weighted average credit score of its investment portfolio. This is
calculated by applying a score to each investment (AAA=1, AA+=2, etc.) and taking the
arithmetic average, weighted by the size of each investment.
Target
Portfolio average credit score
6.3
6
Liquidity: The Council has adopted a voluntary measure of its exposure to liquidity risk by
monitoring the amount of cash available to meet unexpected payments within a rolling three
month period, without additional borrowing.
Target
Total cash available within 3 months
6.4
£5m
Interest Rate Exposures: This indicator is set to control the Council’s exposure to interest rate
risk. While the council has no debt this indicator is not applicable:
2015/16
2016/17
2017/18
Upper limit on fixed interest rate exposure
100%
100%
100%
Upper limit on variable interest rate exposure
100%
100%
100%
Fixed rate investments and borrowings are those where the rate of interest is fixed for the
whole financial year. Instruments that mature during the financial year are classed as variable
rate.
Version 2 (Feb 15)
8
APPENDIX 4
6.5
Maturity Structure of Borrowing: This indicator is set to control the Council’s exposure to
refinancing risk. The upper and lower limits on the maturity structure of fixed rate borrowing
will be:
Upper
Lower
Under 12 months
100%
0%
12 months and within 24 months
100%
0%
24 months and within 5 years
100%
0%
5 years and within 10 years
30%
0%
10 years and above
30%
0%
Time periods start on the first day of each financial year. The maturity date of borrowing is
the earliest date on which the lender can demand repayment.
6.6
Principal Sums Invested for Periods Longer than 364 days: The purpose of this indicator is to
control the Council’s exposure to the risk of incurring losses by seeking early repayment of its
investments. The limits on the total principal sum invested to final maturities beyond the
period end will be:
Limit on principal invested beyond year end
2015/16
2016/17
2017/18
£5m
£3m
£2m
7
Other Items
7.1
There are a number of additional items that the Council is obliged by CIPFA or CLG to include
in its Treasury Management Strategy.
7.2
Policy on Use of Financial Derivatives: The Council will not use standalone financial derivatives
(such as swaps, forwards, futures and options).
7.3
Investment Training: The needs of the Council’s treasury management staff for training in
investment management as part of the staff appraisal process, and additionally when the
responsibilities of individual members of staff change. Staff regularly attend training courses,
seminars and conferences provided by Arlingclose and CIPFA.
7.4
Investment Advisers: The Council has appointed Arlingclose Limited as treasury management
advisers and receives specific advice on investment, debt and capital finance issues.
7.5
Investment of Money Borrowed in Advance of Need: The Council may, from time to time,
borrow in advance of need, where this is expected to provide the best long term value for
money. Since amounts borrowed will be invested until spent, the Council is aware that it will
be exposed to the risk of loss of the borrowed sums, and the risk that investment and
borrowing interest rates may change in the intervening period. These risks will be managed as
part of the Council’s overall management of its treasury risks.
7.6
The total amount borrowed will not exceed the authorised borrowing limit of £10 million. The
maximum period between borrowing and expenditure is expected to be two years, although
the Council is not required to link particular loans with particular items of expenditure.
Version 2 (Feb 15)
9
APPENDIX 4
8
Financial Implications
8.1
The budget for investment income in 2015/16 is £63,000, based on an average investment
portfolio of £12 million at an interest rate of 0.5%. The budget for debt interest paid in
2015/16 is £0, based on an average debt portfolio of £0. If actual levels of investments and
borrowing, and actual interest rates differ from those forecast, performance against budget
will be correspondingly different
9
Other Options Considered
9.1
The CLG Guidance and the CIPFA Code do not prescribe any particular treasury management
strategy for local authorities to adopt. Some alternative strategies, with their financial and risk
management implications, are listed below.
Alternative
Invest in a narrower range of
counterparties and/or for
shorter times
Invest in a wider range of
counterparties and/or for
longer times
Borrow additional sums at longterm fixed interest rates
Impact on income and
expenditure
Interest income will be lower
Interest income will be higher
Debt interest costs will rise;
this is unlikely to be offset by
higher investment income
Borrow short-term or variable
loans instead of long-term
fixed rates
Debt interest costs will initially
be lower
Reduce level of borrowing
Saving on debt interest is likely
to exceed lost investment
income
Version 2 (Feb 15)
Impact on risk management
Lower chance of losses from
credit related defaults, but any
such losses will be greater
Increased risk of losses from
credit related defaults, but any
such losses will be smaller
Higher investment balance
leading to a higher impact in
the event of a default;
however long-term interest
costs will be more certain
Increases in debt interest costs
will be broadly offset by rising
investment income in the
medium term, but long term
costs will be less certain
Reduced investment balance
leading to a lower impact in
the event of a default;
however long-term interest
costs will be less certain
10
APPENDIX 4
Appendix A – Arlingclose Economic & Interest Rate Forecast January 2015
Underlying assumptions:

The UK economic recovery slowed towards the end of 2014, with economic and political
uncertainty weighing on business investment. However, the Q3 growth rate of 0.7% remains
slightly above the long run average, suggesting the recovery remains robust.

Household consumption is key to the recovery in 2015. While we expect consumption growth to
slow, given softening housing market activity and slower employment growth, the fall in inflation
and resulting rise in both real (and nominal) wage growth and disposable income should support
spending.

Inflationary pressure is currently low (annual CPI is currently 0.5%) and is likely to remain so in the
short-term. The fall in oil prices has yet to feed fully into the prices of motor fuel and retail
energy and CPI is expected to fall further. Supermarket price wars are also expected to bear
down on food price inflation.

The MPC's focus is on both the degree of spare capacity in the economy and the rate at which this
will be used up, factors prompting some debate on the Committee.

Nominal earnings growth is strengthening, but remains relatively weak in historical terms, despite
large falls in unemployment. Our view is that spare capacity remains extensive. The levels of parttime, self-employment and underemployment are significant and indicate capacity within the
employed workforce, in addition to the still large unemployed pool. Productivity growth can
therefore remain weak in the short term without creating undue inflationary pressure.

However, we also expect employment growth to slow as economic growth decelerates. This is
likely to boost productivity, which will bear down on unit labour costs and inflationary pressure.

In addition to the lack of wage and inflationary pressures, policymakers are evidently concerned
about the bleak prospects for the Eurozone. These factors will maintain the dovish stance of the
MPC in the medium term. The MPC clearly believes the appropriate level for Bank Rate for the
post-crisis UK economy is significantly lower than the previous norm. We would suggest this is
between 2.5 and 3.5%.

The ECB has introduced outright QE as expected. While this may alleviate some of the anxiety
about the economic potential of the Eurozone, political risk remains significant (e.g. Greek
election). Therefore fears for the Eurozone are likely to maintain a safe haven bid for UK
government debt.
Forecast:

We continue to forecast the first rise in official interest rates in Q3 2015, but the risks to this
forecast are very much weighted to the downside. The February Inflation Report will be key to our
review of the possible path for Bank Rate.

We project a slow rise in Bank Rate. The pace of interest rate rises will be gradual and the extent
of rises limited; we believe the normalised level of Bank Rate post-crisis to range between 2.5%
and 3.5%.

Market sentiment (derived from forward curves) has shifted significantly lower in the past three
months; market expectations are now for a later increase in interest rates and a more muted
increase in gilt yields.

The short run path for gilt yields has flattened due to the sharp decline in inflation expectations.
We project gilt yields on an upward path in the medium term.

The short run path for gilt yields is flatter due to the deteriorating Eurozone situation. We project
gilt yields on an upward path in the medium term.
Version 2 (Feb 15)
11
APPENDIX 4
Version 2 (Feb 15)
12
APPENDIX 4
Appendix B – Existing Investment & Debt Portfolio Position
31 Dec 2014
Total External Borrowing
Actual Portfolio
Average Rate
£m
%
0
0
Other Long Term Liabilities:
Finance Leases
0.10
Total Gross External Debt
0.10
Investments:
Managed in-house
Short-term investments
6.5
.70
Certificates of Deposit
3
.63
Money Market Funds
2
.33
Instant Access Reserve Accounts
4
.50
Notice Reserve Accounts
1
.52
Term Deposits
Total Investments
(16.5)
Net Debt
(16.4)
Version 2 (Feb 15)
13
APPENDIX 5
MALDON
DISTRICT
COUNCIL
Financial Regulations and
Financial Procedures
Updated April 2012March 2015
APPENDIX 5
Contents
1.
Status of Financial Regulations
2.
Financial Regulations
A: Financial Management
B: Financial Planning
C: Risk Management and Control of Resources
D: Systems and Procedures
E: External Arrangements
1
5
7
9
10
Financial Procedures – Appendix A
Financial management standards
Managing expenditure
Accounting policies
Accounting records and returns
The Annual Statement of Accounts
11
11
13
13
15
Financial Planning – Appendix B
Performance plans
Budgeting
Maintenance of reserves
16
16
22
Risk Management and Control of Resources – Appendix C
Risk management
Internal controls
Audit requirements
Preventing fraud and corruption
Assets
Treasury management
Staffing
24
25
26
29
30
32
34
Financial Systems and Procedures – Appendix D
General
Income and expenditure
Ordering and paying for work, goods and services
Payments to employees and Members
Taxation
Trading accounts and business units
36
37
39
42
44
45
External Arrangements – Appendix E
Partnerships
External funding
Work for third parties
46
48
48
Financial limits – Appendix F
50
Banking Mandate – Appendix G
Authorisation Arrangements – Appendix H
52
53
3.
APPENDIX 5
Status of Financial Regulations
1.
Financial regulations provide the framework for managing the Council’s financial affairs.
They apply to every member and officer of the Council and anyone acting on its behalf.
2.
The regulations identify the financial responsibilities of the Council, the Committees, the
Chief Executive, the Chief Finance OfficerDirector of Resources, the Monitoring Officer,
Head of Financial Services, Head of Organisational Development and other Heads of
ServiceDirectors. Heads of ServiceDirectors should maintain a written record where decision
making has been delegated to members of their staff, including seconded staff. Where
decisions have been delegated or devolved to other responsible officers, references to the
Head of ServiceDirector in the regulations should be read as referring to them.
3.
All Council Members and staff have a general responsibility for taking reasonable action to
provide for the security of the assets under their control, and for ensuring that the use of these
resources is legal, properly authorised, provides value for money and achieves best value.
4.
The Head of Financial ServicesDirector of Resources is responsible for maintaining a
continuous review of the financial regulations and submitting any additions or changes
necessary to the Council for approval. The Head of Financial ServicesDirector of Resources is
also responsible for reporting, where appropriate, breaches of the financial regulations to the
Finance and Corporate Services Committee. Any non-compliance with the Regulations must
be reported to the Head of Financial ServicesDirector of Resources. Anyone wishing to act
outside the provisions of these regulations, in a specific instance, must seek the prior written
approval of the Head of Financial ServicesDirector of Resources.
5.
The Council’s detailed financial procedures, setting out how the regulations will be
implemented, are contained in the appendices to the financial regulations.
6.
The Head of Financial ServicesDirector of Resources is responsible for ensuring that all staff
are aware of the existence and content of the Council’s financial regulations and other internal
regulatory documents and that they comply with them.
7.
The Head of Financial ServicesDirector of Resources is responsible for issuing advice and
guidance to underpin the financial regulations that Members, Officers and others acting on
behalf of the Council are required to follow. Notes and guidance may expand, but not
contradict the Regulations. Any consultation required under these Regulations must allow
sufficient time for a proper consideration of any issues.
8.
All financial and accounting procedures must be carried out in accordance with the
Regulations.
APPENDIX 5
Financial Management
1.
INTRODUCTION
1.1
Financial management covers all financial accountabilities in relation to the running of the
Council, including the policy framework and budget.
2.
THE COUNCIL
2.1
The Council is responsible for adopting the Corporate Governance arrangements (Standing
orders and Terms of Reference), for approving the annual budget and the policy framework
within which the Committees operate. It is also responsible for approving and monitoring
compliance with the Council’s overall framework of accountability and control. The
framework is set out in its Corporate Governance arrangements. The Council is also
responsible for monitoring compliance with the agreed policy and related Committee
decisions.
2.2
The Council is responsible for approving procedures for recording and reporting decisions
taken. This includes those key decisions delegated by and decisions taken by the Council and
its Committees.
3.
THE COMMITTEES
3.1
The Finance and Corporate Services Committee is responsible for proposing the annual
budget to the Council, and for discharging its own functions in accordance with that budget
and framework.
3.2
Once approved, each Standing Committee is responsible for the administration of the budget
for the services set out in its Terms of Reference.
3.3
Committee decisions can be delegated to an officer or a sub committee.
3.4
The Committees are responsible for establishing protocols to ensure that decisions take
account of legal and financial liabilities and risk management issues that may arise from the
decision.
3.5
The Overview and Scrutiny Committee along with its major role in reviewing Best Value,
has power to scrutinise decisions made, or action taken, in respect of any of the functions of
the Council which have financial implications. It also has powers to make recommendations
on future financial policy options and for reviewing the general financial policy and service
delivery of the Council.
3.6
The Standards Committee is established by the Council and is responsible for promoting and
maintaining high standards of conduct amongst councillors. In particular, it is responsible for
advising the Council on the adoption and revision of the Members’ code of conduct, and for
monitoring the operation of the code.
1
APPENDIX 5
4.
THE STATUTORY OFFICERS
4.1
Head of Paid Service
4.1.1
The Chief Executive is the Head of Paid Service and is responsible for the corporate and
overall strategic management of the Council as a whole. He/she must report to and provide
information for the Council, the Standing Committees and other Committees. He/she is
responsible for establishing a framework for management direction, style and standards and
for monitoring the performance of the organisation. The Chief Executive is also responsible,
together with the Monitoring Officer, for the system of record keeping in relation to all the
Council’s decisions (see below).
4.1.2
The Head of Paid Service is responsible for keeping the Council’s corporate governance
arrangements up to date.
4.2
Monitoring Officer
4.2.1
The Monitoring Officer is responsible for promoting and maintaining high standards of
financial conduct and therefore provides support to the Standards Committee. The
Monitoring Officer is also responsible for reporting any actual or potential breaches of the
law or maladministration to the Council and/or to the Committees, and for ensuring that
procedures for recording and reporting key decisions, as defined in the Constitution, are
operating effectively.
4.2.2
The Monitoring Officer must ensure that Committees' decisions and the reasons for them are
made public. He/she must also ensure that Council Members are aware of decisions made by
Committees and of those made by officers who have delegated responsibility.
4.2.3
The Monitoring Officer is responsible for advising all Members and officers about who has
authority to take a particular decision.
4.2.4
The Monitoring Officer is responsible for advising the Committees or Council about whether
a decision is likely to be considered contrary or not wholly in accordance with the policy
framework.
4.2.5
The Monitoring Officer (together with the Chief Executive) is responsible for advising the
Committees or Council about whether a decision is likely to be considered contrary or not
wholly in accordance with the budget. Actions that may be ‘contrary to the budget’ include:
4.2.6
4.3
4.3.1
a)
initiating a new policy;
b)
committing expenditure in future years to above the current budget level;
c)
incurring expenditure where no estimate or an inadequate estimate exists thereby
giving rise to the necessity for supplementary estimates or virements above approved
limits;
d)
causing the total expenditure financed from council tax, grants and corporately held
reserves to increase, or to increase by more than a specified amount.
The Head of Paid Service is responsible for keeping the Council’s corporate governance
arrangements up to date.
Section 151 Officer (Chief Finance Officer)
The Officer designated in this roleDirector of Resources is the Chief Finance Officer and has
statutory duties in relation to the financial administration and stewardship of the Council.
This statutory responsibility cannot be overridden. The statutory duties arise from:
2
APPENDIX 5
a)
b)
c)
d)
e)
4.3.2
Section 151 of the Local Government Act 1972;
The Local Government Finance Act 1988;
The Local Government and Housing Act 1989;
The Accounts and Audit Regulations 2003;
The Localism Act 2011.
The Section 151 Officer (Chief Finance Officer) is responsible for:
a)
the proper administration of the Council’s financial affairs;
b)
setting and monitoring compliance with financial management standards;
c)
advising on the corporate financial position and on the key financial controls necessary
to secure sound financial management;
d)
providing financial information;
e)
preparing the revenue budget and capital programme;
Operational responsibility for these matters is assigned to the Head of Financial
ServicesDirector of Resources or Finance Manager (as Deputy S151 Officer for the authority).
4.3.3
Section 114 of the Local Government Finance Act 1988 requires the Chief Finance Officer
(Section 151 Officer) to report to the Council, Committees and external auditor if the
Council, Committees or one of its officers or members:
a)
b)
c)
has made, or is about to make, a decision which involves incurring unlawful
expenditure;
has taken, or is about to take, an unlawful action which has resulted or would result in
a loss or deficiency to the Council;
is about to make an unlawful entry in the Council’s accounts.
Section 114 of the 1988 Act also requires:
d)
the Chief Finance Officer to nominate a properly qualified member of staff to deputise
should he/she be unable to perform the duties under section 114 personally;
e)
the Council to provide the Chief Finance Officer with sufficient staff, accommodation
and other resources, including legal advice where this is necessary, to carry out the
duties under section 114.
5.
STRATEGIC DIRECTOR/HEADS OF SERVICEDIRECTORS
5.1
Heads of ServiceDirectors are responsible for ensuring that Committees are advised of the
financial implications of all proposals and that the financial implications have been agreed
by the Head of Financial ServicesDirector of Resources;
5.2
The Strategic DirectorDirectors and the Head of Paid Service are responsible for signing
contracts on behalf of the Council.
5.3
It is the responsibility of Heads of ServiceDirectors and Committees to consult with the
Head of Financial ServicesDirector of Resources and Chief Executive and seek approval on
any matter liable to affect the Council’s finances, before any commitments are incurred.
3
APPENDIX 5
6.
OTHER FINANCIAL ACCOUNTABILITIES
6.1
Virement
6.1.1
The Council is responsible for agreeing procedures for revenue and capital virement of
expenditure or income between budget headings.
6.1.2
Heads of ServiceDirectors must consult the Head of Financial ServicesDirector of Resources
on all virements, (see Appendix F)
6.2
Treatment of year-end balances
6.2.1
The Head of Financial ServicesDirector of Resources is responsible for agreeing procedures
for carrying forward under-spending on budget headings.
6.3
Accounting policies
6.3.1
The Head of Financial ServicesDirector of Resources is responsible for selecting accounting
policies and ensuring that they are applied consistently.
6.4
Accounting records and returns
6.4.1
The Head of Financial ServicesDirector of Resources is responsible for determining the
accounting procedures and records for the Council.
6.5
The Annual Statement of Accounts
6.5.1
The Chief Finance OfficerDirector of Resources is responsible for ensuring that the annual
Statement of Accounts is prepared in accordance with the Chartered Institute of Public
Finance and Accountancy (CIPFA) Code of Practice for Local Authority Accounting in the
United Kingdom and that the annual accounts are published by 30 September each year.
The Finance and Corporate ServicesAudit Committee is responsible for approving the
annual Statement of Accounts in accordance with the timescale set out in the accounting
regulations.
4
APPENDIX 5
Financial Planning
1.
INTRODUCTION
1.1
The Council is responsible for agreeing the Council’s policy framework, in particular the
Community Strategy and Corporate Plan. It is also responsible for agreeing the budget, the
main framework of which will be proposed by the Finance and Corporate Services
Committee. In terms of financial planning, the key elements are:
a)
b)
c)
the revenue budget;
the medium term financial strategy (MTFS);
the capital programme.
2.
POLICY FRAMEWORK
2.1
The policy framework comprises a number of statutory plans and strategies, which are set
out in the Councils Corporate Governance arrangements.
2.2
The Council is also responsible for approving procedures for agreeing variations to approved
budgets, plans and strategies forming the policy framework and for determining the
circumstances in which a decision will be deemed to be contrary to the budget or policy
framework. The Monitoring Officer or the Chief Executive, as appropriate, should refer
decisions to the Council.
2.3
The Standing Committees are responsible for taking in-year decisions on resources and
priorities in order to deliver the budget policy framework within the financial limits set by
the Council.
2.4
Preparation of the Sustainable Community Strategy and Corporate Plan
2.4.1
The Chief Executive is responsible for proposing the Sustainable Community
StrategyCorporate Plan to the Council for approval.
3.
BUDGETING
3.1
Budget format
3.1.1
The general format of the budget will be approved by the Finance and Corporate Services
Committee and the Council on the advice of the Head of Financial ServicesDirector of
Resources. The draft budget should include current approvals updated for inflation and
volume changes, proposals for growth and savings, together with the proposed taxation
level.
3.2
Budget preparation
3.2.1
The Head of Financial ServicesDirector of Resources is responsible for ensuring that a
revenue budget is prepared on an annual basis and a MTFS at least on a three-yearly basis
for consideration by the Finance and Corporate Services Committee, before submission to
the Council. The Council may amend the budget before approving it.
3.3
Budget monitoring and control
3.3.1
The Head of Financial ServicesDirector of Resources is responsible for providing
appropriate financial information to enable budgets to be monitored effectively. He/she must
monitor and control expenditure against budget allocations and report to the Finance &
Corporate Services Committee on the overall position on a quarterly basis.
5
APPENDIX 5
3.3.2
It is the responsibility of Heads of ServiceDirectors to control income and expenditure
within their area and to monitor performance, taking account of financial information
provided by the Head of Financial ServicesDirector of Resources. They should also take any
action necessary to avoid exceeding their budget allocation and alert the Head of Financial
ServicesDirector of Resources to any problems.
3.4
Resource allocation
3.4.1
The Head of Financial ServicesDirector of Resources is responsible for developing and
maintaining a resource allocation process that ensures due consideration of the Council’s
strategic and financial planning process.
3.5
Preparation of the Capital Strategy
3.5.1
The Head of Financial ServicesDirector of Resources is responsible for ensuring that the
Capital Strategy and Capital Programme are prepared on an annual basis for consideration
by the Finance & Corporate Services Committee before submission to the Council.
3.6
Guidelines
3.6.1
Guidelines on budget policies are issued to Heads of ServicesDirectors by the Head of
Financial ServicesDirector of Resources following approval of the Finance and Corporate
Services Committee. The guidelines will take account of:
a)
b)
c)
d)
e)
f)
g)
h)
i)
legal requirements;
medium-term financial strategy;
the Sustainable Community Strategy and Corporate Plan;
available resources;
spending pressures;
best value and other relevant guidelines issued by government guidelinesor external
audit;
other internal policy documents;
cross-cutting issues (where relevant);
external partnerships.
4.
MAINTENANCE OF RESERVES
4.1
It is the responsibility of the Chief Finance OfficerDirector of Resources to advise the
Finance and Corporate Services Committee on prudent levels of reserves for the Council.
6
APPENDIX 5
Risk Management and Control of Resources
1.
INTRODUCTION
1.1
It is essential that robust, integrated systems are developed and maintained for identifying
and evaluating all significant operational risks to the Council. This should include the
proactive participation of all those associated with planning and delivering services.
2.
RISK MANAGEMENT
2.1
The Finance & Corporate Services Committees is responsible for approving the Council’s
Risk Management PolicyStrategy Statement. The Overview & ScrutinyAudit Committee is
responsible for reviewing the effectiveness of risk management. The Finance and Corporate
Services Committee is responsible for ensuring that proper insurance exists where
appropriate.
2.2
The Head of Organisational DevelopmentDirector of Resources is responsible for preparing
the Council’s Risk Management Strategy StatementPolicy and for promoting it throughout
the Council with the Head of Financial Servicesand is responsible for advising the
Committees on proper insurance cover where appropriate.
3.
INTERNAL CONTROL
3.1
Internal control refers to the systems of control devised by management to help ensure the
Council’s objectives are achieved in a manner that promotes economical, efficient and
effective use of resources and that the Council’s assets and interests are safeguarded.
3.2
The Chief Finance OfficerDirector of Resources is responsible for advising on effective
systems of internal control. These arrangements need to ensure compliance with all
applicable statutes and regulations, and other relevant statements of best practice. They
should ensure that public funds are properly safeguarded and used economically, efficiently,
and in accordance with the statutory and other authorities that govern their use.
3.3
It is the responsibility of Heads of ServiceDirectors to establish sound arrangements for
planning, appraising, authorising and controlling their operations in order to achieve
continuous improvement, economy, efficiency and effectiveness and for achieving their
financial performance targets.
4.
AUDIT REQUIREMENTS
4.1
The Accounts and Audit Regulations require every local Council to maintain an adequate
and effective internal audit.
4.2
The Audit Commission is responsible for appointing external auditors to each local
authority. The basic duties of the external auditor are governed by section 15 of the Local
Government Finance Act 1982, as amended by section 5 of the Audit Commission Act 1998.
4.3
The Council may, from time to time, be subject to audit, inspection or investigation by
external bodies such as HM Revenues and Customs, which have statutory rights of access.
5.
PREVENTING FRAUD AND CORRUPTION
5.1
The Director of Planning and Regulatory Services and Director of Resources Head of
Organisational Development are responsible for the development and maintenance of an
Anti-Fraud and Anti-Corruption Policy respectively.
7
APPENDIX 5
6.
ASSETS
6.1
Heads of ServiceDirectors should ensure that records of the Council’s assets in excess of the
limit set out in section 1.7 of Appendix F are properly maintained and securely held. They
should also ensure that contingency plans for the security of assets and continuity of service
in the event of disaster or system failure are in place. The Chief Finance OfficerDirector of
Resources should ensure that all assets above the specified value are properly recorded in the
asset register.
7.
TREASURY MANAGEMENT
7.1
The Council has adopted CIPFA’s Code of Practice for Treasury Management in Local
Authorities.
7.2
The Finance and Corporate Services Committee is responsible for approving the treasury
management policy and Treasury Management Practices (TMP’s) setting out the matters
detailed in CIPFA’s Code of Practice for Treasury Management in Local Authorities. The
Head of Financial ServicesDirector of Resources has delegated responsibility for
implementing and monitoring the TMP’s.
7.3
All money in the hands of the Council is controlled by the officer designated for the
purposes of section 151 of the Local Government Act 1972, referred to in the code as the
Chief Finance OfficerDirector of Resources.
7.4
Subject to the Council setting the overall borrowing limits in accordance with the Prudential
Code, the day to day decisions on borrowing, investment or financing shall be delegated to
the Head of Financial ServicesDirector of Resources, who is required to act in accordance
with CIPFA’s Code of Practice for Treasury Management in Local Authorities.
8.
STAFFING
8.1
The Chief Executive is responsible for providing overall management to staff. He/she is also
responsible for ensuring that there is proper use of the evaluation or other agreed systems for
determining the remuneration of a job.
8.2
Heads of ServiceDirectors, in consultation with the Chief Finance OfficerDirector of
Resources, are responsible for controlling total staff numbers by:
a)
b)
c)
advising the Council on the budget necessary in any given year to cover estimated
staffing levels;
adjusting the staffing to a level that can be funded within approved budget provision,
varying the provision as necessary within that constraint in order to meet changing
operational needs;
the proper use of appointment procedures.
8
APPENDIX 5
Systems and Procedures
1.
INTRODUCTION
1.1
Sound systems and procedures are essential to an effective framework of accountability and
control.
2.
GENERAL
2.1
The Head of Financial ServicesDirector of Resources is responsible for the operation of the
Council’s accounting systems, the form of accounts and the supporting financial records.
The Head of Financial ServicesDirector of Resources must determine any changes proposed
by Heads of ServiceDirectors to the existing financial systems or the establishment of new
systems. However, Heads of ServiceDirectors are responsible for the proper operation of
financial processes in their own services.
2.2
Any changes to agreed procedures by Heads of ServiceDirectors to meet their own specific
service needs should be agreed with the Head of Financial ServicesDirector of Resources.
2.3
The Head of Financial ServicesDirector of Resources should ensure that all staff receive
relevant financial training.
2.4
Heads of ServiceDirectors must ensure that, where appropriate, computer and other systems
are registered in accordance with Data Protection legislation. Heads of ServiceDirectors
must ensure that staff are aware of their responsibilities under freedom of information
legislation.
3.
INCOME AND EXPENDITURE
3.1
It is the responsibility of Heads of ServiceDirectors to ensure that a proper scheme of
delegation has been established within their area and is operating effectively. The scheme of
delegation should identify staff authorised in writing to act on the Head of
Service’sDirectors behalf, or on behalf of the Council, in respect of payments, income
collection and placing orders, together with the limits of their authority. The Finance and
Corporate Services Committee is responsible for approving procedures for writing off debts
as part of the overall control framework of accountability and control.
4.
PAYMENTS TO EMPLOYEES AND MEMBERS
4.1
The Head of Financial ServicesDirector of Resources is responsible for all payments of
salaries and allowances to all staff, including payments for overtime, and for payment of
allowances to Members.
5.
TAXATION
5.1
The Head of Financial ServicesDirector of Resources is responsible for advising Heads of
ServiceDirectors, in the light of guidance issued by appropriate bodies and relevant
legislation as it applies, on all taxation issues that affect the Council.
5.2
The Head of Financial ServicesDirector of Resources is responsible for maintaining the
Council’s tax records, making all tax payments, receiving tax credits and submitting tax
returns by their due date as appropriate.
6.
TRADING ACCOUNTS
9
APPENDIX 5
6.1
It is the responsibility of the Head of Financial ServicesDirector of Resources to advise on
the establishment and operation of trading accounts.
10
APPENDIX 5
External Arrangements
1.
INTRODUCTION
1.1
The Council provides a distinctive leadership role for the community and brings together the
contributions of the various stakeholders. It must also act to achieve the promotion or
improvement of the economic, social or environmental well-being of its area.
2.
PARTNERSHIPS
2.1
The Standing Committees are responsible for approving delegations, including frameworks
for partnerships. The Standing Committees are the focus for forming partnerships with other
local public, private, voluntary and community sector organisations to address local needs.
2.2
The Standing Committees can delegate functions, including those relating to partnerships, to
officers. These are set out in the scheme of delegation that forms part of the Council’s
corporate governance arrangements. Where functions are delegated, the Standing
Committees remain accountable for them to the Council.
2.3
The Director of Resources Chief Finance Officer is responsible for promoting and
maintaining the same high standards of conduct with regard to financial administration in
partnerships that apply throughout the Council.
2.4
The Chief Finance OfficerDirector of Resources, in consultation with the Councils
designated legal advisor, must ensure that the accounting arrangements to be adopted
relating to partnerships and joint ventures are satisfactory. He/she must also consider the
overall corporate governance arrangements and in consultation with the designated legal
advisor, legal issues when arranging contracts with external bodies. He/she must ensure that
the risks have been fully appraised before agreements are entered into with external bodies.
2.5
Standing Committees are responsible for ensuring that appropriate approvals are obtained
before any negotiations are concluded in relation to work with external bodies.
3.
EXTERNAL FUNDING
3.1
The Head of Financial ServicesDirector of Resources is responsible for ensuring that all
funding notified by external bodies is received and properly recorded in the Council’s
accounts.
11
APPENDIX 5
Appendix A
FINANCIAL MANAGEMENT
1.
FINANCIAL MANAGEMENT STANDARDS
1.1
Why is this important?
1.1.1
All staff and Members have a duty to abide by the highest standards of probity in dealing
with financial issues. This is facilitated by ensuring everyone is clear about the standards to
which they are working and the controls that are in place to ensure that these standards are
met.
1.2
Key controls
1.2.1
The key controls and control objectives for financial management standards are
(a)
their promotion throughout the Council;
(b)
a monitoring system to review compliance with financial standards, and regular
comparisons of performance indicators and benchmark standards that are reported to
the Finance and Corporate Services and/or Overview & Scrutiny Committees.
1.3
Responsibilities of the Chief Finance Officer (Section 151 Officer)Director of Resources
1.3.1
To ensure the proper administration of the financial affairs of the Council.
1.3.2
To set the financial management standards and to monitor compliance with them.
1.3.3
To ensure proper professional practices are adhered to and to act as head of profession in
relation to the standards, performance and development of finance staff throughout the
Council.
1.3.4
To advise on the key strategic controls necessary to secure sound financial management.
1.3.5
To ensure that financial information is available to enable accurate and timely monitoring
and reporting of comparisons of national and local financial performance indicators.
1.4
Responsibilities of Heads of ServiceDirectors
1.4.1
To promote the financial management standards set by the Chief Executive in their service
and to monitor adherence to the standards and practices, liaising as necessary with the Head
of Financial ServicesDirector of Resources.
1.4.2
To promote sound financial practices in relation to the standards, performance and
development of staff in their departments.
2.
MANAGING EXPENDITURE
2.1
Scheme of Virement
2.1.1
2.1.1.1
The scheme of virement is intended to enable the Standing Committees, Heads of
ServiceDirectors and their staff to manage budgets with a degree of flexibility within the
overall policy framework determined by the Council, and therefore to optimise the use of
resources.
12
APPENDIX 5
Appendix A
2.2
Key controls
2.2.1
Key controls for the scheme of virement are:
(a)
it is administered by the Chief Finance OfficerDirector of Resources within guidelines
set by the Council. Any variation from this scheme requires the approval of the
Council;
(b)
the overall budget is proposed by the Finance and Corporate Services Committee and
approved by the Council. Heads of ServiceDirectors and budget managers holders are
therefore authorised to incur expenditure in accordance with the estimates that make
up the budget. The rules below cover virement (i.e. switching resources between
approved estimate headings of expenditure or income). For the purposes of this
scheme, a budget heading is considered to be a line in the Budget Summary of the
Budget Book;
(c)
virement does not create additional overall budget liability. Heads of ServiceDirectors
are expected to exercise their discretion in managing their budgets responsibly and
prudently. For example, they should aim to avoid supporting recurring expenditure
from one-off sources of savings or additional income, or creating future commitments,
including full-year effects of decisions made part way through a year, for which they
have not identified future resources. Heads of ServiceDirectors must plan to fund such
commitments from within their own budgets.
2.3
Responsibilities of the Head of Financial ServicesDirector of Resources
2.3.1
To prepare jointly with the Heads of ServiceDirectors, a report to the Finance & Corporate
Services Committee where revenue and capital virements, between different budget heads, in
excess of specified financial limits are proposed (see Appendix F).
2.4
2.4.1
A Head of ServiceDirector, in consultation with the Head of Financial ServicesDirector of
Resources may exercise virement within the same budget head under his/her control for any
amount. Virements between different budget heads must be reported to the Finance &
Corporate Services Committee. The authorisation limits are set out in Appendix F.
2.4.2
Amounts that require the approval of the Finance & Corporate Services Committee must
specify the proposed expenditure and the source of funding, and must explain the
implications in the current and future financial years.
2.4.3
Virement that is likely to impact on the level of service activity of another Head of
ServiceDirector should be implemented only after agreement with the relevant Head of
ServiceDirector.
2.4.4
No virement relating to a specific financial year should be made after 31 March in that year.
2.4.5
Where an approved budget is a lump-sum budget or contingency intended for allocation
during the year, its allocation will not be treated as a virement, provided that:
a) the amount is used in accordance with the purposes for which it has been established;
b) the Finance & Corporate Services Committee has approved the basis and the terms,
including financial limits, on which it will be allocated. Individual allocations in excess
of the financial limits should be reported to the Finance and Corporate Services
Committee.
13
APPENDIX 5
Appendix A
2.4.6
Virements are not permitted in relation to asset charges or other budget headings which are
outside the control of the Heads of ServiceDirectors or where a proposal would adversely
affect long term revenue commitments.
3.
ACCOUNTING POLICIES
3.1
3.1.1
The Chief Finance OfficerDirector of Resources is responsible for the preparation of the
Council’s Statement of Accounts, in accordance with proper practices as set out in the
format required by the CIPFA Code of Practice on Local Authority Accounting in the United
Kingdom for each financial year ending 31 March.
3.2
Key controls
3.2.1
The key controls for accounting policies are:
a) systems of internal control are in place that ensure that financial transactions are lawful;
b) suitable accounting policies are selected and applied consistently;
c) proper accounting records are maintained;
d) financial statements are prepared which present fairly the financial position of the
Council and its expenditure and income.
3.3
3.3.1
To select suitable accounting policies and to ensure that they are applied consistently. The
accounting policies are set out in the Statement of Accounts, which is prepared at 31 March
each year, and covers such items as:
a)
b)
c)
d)
e)
f)
g)
h)
i)
j)
k)
l)
income and expenditure;
fixed assets;
treatment of leasing;
depreciation;
charges to revenue;
capital receipts;
debtors and creditors;
support services;
pensions;
government grants;
investments;
reserves.
3.4
3.4.1
To adhere to the accounting policies and guidelines approved by the Head of Financial
ServicesDirector of Resources.
4.
ACCOUNTING RECORDS AND RETURNS
4.1
14
APPENDIX 5
Appendix A
4.1.1
Maintaining proper accounting records is one of the ways in which the Council discharges
its responsibility for stewardship of public resources. The Council has a statutory
responsibility to prepare its annual accounts to present fairly its operations during the year.
These are subject to external audit. This audit provides assurance that the accounts are
prepared properly, that proper accounting practices have been followed and that quality
arrangements have been made for securing economy, efficiency and effectiveness in the use
of the Council’s resources.
4.2
Key controls
4.2.1
The key controls for accounting records and returns are:
a)
all Committees, finance staff and budget managers operate within the required
accounting standards and timetables;
b)
all the Council’s transactions, material commitments and contracts and other essential
accounting information are recorded completely, accurately and on a timely basis;
c)
procedures are in place to enable accounting records to be reconstituted in the event of
systems failure;
d)
reconciliation procedures are carried out to ensure transactions are correctly recorded;
e)
prime documents are retained in accordance with legislative and other requirements.
4.3
4.3.1
To determine the accounting procedures and records for the Council. Where these are
maintained outside his/her department, the Head of Financial ServicesDirector of Resources
should consult the Head of ServiceDirector concerned.
4.3.2
To arrange for the compilation of all accounts and accounting records under his/her
direction.
4.3.3
To comply with the following principles when allocating accounting duties:
a)
separating the duties of providing information about sums due to or from the Council
and calculating, checking and recording these sums from the duty of collecting or
disbursing them;
b)
employees with the duty of examining or checking the accounts of cash transactions
must not themselves be engaged in these transactions.
4.3.4
To make proper arrangements for the audit of the Council’s accounts in accordance with the
Accounts and Audit Regulations 2003.
4.3.5
To ensure that all claims for funds including grants are made by the due date.
4.3.6
To prepare and publish the audited accounts of the Council for each financial year, in
accordance with the statutory timetable and with the requirement for the Finance and
Corporate Services Audit Committee to approve the Statement of Accounts.
4.3.7
To administer arrangements for under-spending to be carried forward to the following
financial year.
4.3.8
To ensure the proper retention of financial documents in accordance with the requirements
set out in the Council’s document retention guidelines.
15
APPENDIX 5
Appendix A
4.4
4.4.1
To consult and obtain the approval of the Head of Financial ServicesDirector of Resources
before making any changes to accounting records and procedures.
4.4.2
To maintain adequate records to provide a management trail leading from the source of
income/expenditure through to the accounting statements.
4.4.3
To supply information required to enable the Statement of Accounts to be completed in
accordance with guidelines issued by the Head of Financial ServicesDirector of Resources.
5.
THE ANNUAL STATEMENT OF ACCOUNTS
5.1
5.1.1
The Council has a statutory responsibility to prepare its own accounts to present fairly its
operations during the year. The Finance and Corporate ServicesAudit Committee is
responsible for approving the statutory annual Statement of Accounts.
5.2
Key controls
5.2.1
The key controls for the annual Statement of Accounts are:
a)
the Council is required to make arrangements for the proper administration of its
financial affairs and to secure that one of its officers has the responsibility for the
administration of these affairs. In this Council, that officer is the Chief Finance
OfficerDirector of Resources (Section 151 Officer);
b)
the Council’s Statement of Accounts must be prepared in accordance with proper
practices as set out in the latest CIPFA Code of Practice on Local Authority Accounting
in the United Kingdom.
5.3
Responsibilities of the Chief Finance OfficerDirector of Resources
5.3.1
To sign and date the Statement of Accounts, stating that it presents fairly the financial
position of the Council at the accounting date and its income and expenditure for the year
ended 31 March.
5.4
Responsibilities of the Head of Financial Services
5.4.15.3.2
To select suitable accounting policies and to apply them consistently.
5.4.25.3.3
To make judgements and estimates that is reasonable and prudent.
5.4.35.3.4
To comply with the latest accounting Code of Practice.
5.4.45.3.5
To draw up the timetable for final accounts preparation and to advise staff and
external auditors accordingly.
5.54
5.54.1
To comply with accounting guidance provided by the Head of Financial Services Director of
Resources and to supply him/her with information when required.
16
APPENDIX 5
Financial Planning
Appendix B
Financial Planning
1.
PERFORMANCE PLANS
1.1
1.1.1
The purpose of performance plans is to explain overall priorities and objectives, current
performance, and proposals for further improvement.
1.2
Key controls
1.2.1
The key controls for performance plans are:
(a) to meet the timetables set;
(b) to ensure that all performance information is accurate, complete and up to date;
(c) to provide improvement targets which are meaningful, realistic and challenging.
1.3
Responsibilities of the Director of Resources Head of Organisational Development
1.3.1
To contribute to the development of corporate and service targets and objectives and
performance information.
1.3.2
To ensure that corporate systems are in place to measure activity and collect accurate
information for use as performance indicators.
1.3.3
To ensure that performance information is collected and monitored sufficiently frequently to
allow corrective action to be taken if targets are not likely to be met.
1.4
1.4.1
To contribute to the development of performance plans in line with statutory requirements.
1.4.2
To contribute to the development of corporate and service targets and objectives and
performance information.
1.4.3
To ensure that systems are in place within their service area to measure activity and collect
accurate information for use as performance indicators.
1.4.4
To ensure that performance information is collected and monitored sufficiently frequently to
allow corrective action to be taken if targets are not likely to be met.
2.
BUDGETING
2.1
Format of the budget
2.1.1
2.1.1.1
The structure of the budget determines the level of detail to which financial control and
management will be exercised. The structure shapes how the rules around virement operate,
the operation of financial limits and sets the level at which funds may be reallocated within
budgets.
2.2
Key controls
2.2.1
The key controls for the budget structure are:
17
APPENDIX 5
Financial Planning
Appendix B
2.3
a)
the structure complies with all legal requirements;
b)
the structure reflects the accountabilities of service delivery.
2.3.1
To comply with accounting guidance provided by the Head of Financial ServicesDirector of
Resources.
2.4
Revenue budget preparation, monitoring and control
2.4.1
2.4.1.1
Budget management ensures that once the budget has been approved by the Council,
resources allocated are used for their intended purposes and are properly accounted for.
Budgetary control is a continuous process, enabling the Council to review and adjust its
budget targets during the financial year. It also provides the mechanism that calls to account,
managers responsible for defined elements of the budget.
2.4.1.2
By continuously identifying and explaining variances against budgetary targets, the Council
can identify changes in trends and resource requirements at the earliest opportunity. The
Council itself operates within an annual financial limit, approved when setting the overall
budget. To ensure that the Council in total does not overspend, each service is required to
manage its own expenditure within the budget allocated to it.
2.4.1.3
For the purposes of budgetary control by managers, a budget will normally be the planned
income and expenditure for a service or policy area. However, budgetary control may take
place at a more detailed level if this is required by the Head of Service’sDirectors scheme of
delegation or by the Council.
2.5
Key controls
2.5.1
The key controls for managing and controlling the revenue budget are:
a)
budget managers should be responsible only for income and expenditure that they can
influence;
b)
there is only one nominated budget manager for each budget area;
c)
budget managers accept accountability for their budgets and the level of service to be
delivered and understand their financial responsibilities;
d)
budget managers follow an approved certification process for all expenditure;
e)
income and expenditure are properly recorded and accounted for;
f)
performance levels/levels of service are monitored in conjunction with the budget and
necessary action is taken to align service outputs and budget;
g)
Managers should supervise the financial management of those reporting to them.
2.6
2.6.1
To establish an appropriate framework of budgetary management and control that ensures
that:
18
APPENDIX 5
Financial Planning
Appendix B
a)
budget management is exercised within annual financial limits unless the Council
agrees otherwise;
b)
each Head of Service has available timely information on receipts and payments on
each budget which is sufficiently detailed to enable managers to fulfil their budgetary
responsibilities;
c)
all officers responsible for committing expenditure comply with relevant guidance, and
the financial regulations;
d)
each cost centre has a single named manager, determined by the relevant Head of
ServiceDirector. As a general principle, budget responsibility should be aligned as
closely as possible to the decision-making processes that commits expenditure;
e)
significant variances from approved budgets are investigated and reported by budget
managers regularly.
2.6.2
To administer the Council’s scheme of virement.
2.6.3
To submit reports to the Finance and Corporate Services Committee and to the Council, in
consultation with the relevant Head of ServiceDirector, where a Head of ServiceDirector is
unable to balance expenditure and resources within existing approved budgets under his/her
control.
2.6.4
To prepare and submit reports on the Council’s projected income and expenditure compared
with the budget on a quarterly basis.
2.7
2.7.1
To maintain budgetary control within their services, in adherence to the principles in 2.6.1,
and to ensure that all income and expenditure are properly recorded and accounted for.
2.7.2
To ensure that an accountable budget manager is identified for each item of income and
expenditure under the control of the Head of ServiceDirector. As a general principle, budget
responsibility should be aligned as closely as possible to the decision-making that commits
expenditure.
2.7.3
To ensure that spending remains within the service’s overall financial limit, and that
individual budget headings are not overspent, by monitoring the budget and taking
appropriate corrective action where significant variations from the approved budget are
forecast.
2.7.4
To ensure that a monitoring process is in place to review performance levels/levels of
service in conjunction with the budget and that it is operating effectively.
2.7.5
To ensure prior approval by the Council or Standing Committees (as appropriate) for new
proposals, of whatever amount, that:
a)
create financial commitments in the current or future years;
b)
change existing policies, initiate new policies or cease existing policies;
c)
materially extend or reduce the Council’s services.
2.7.6
To ensure compliance with the scheme of virement.
2.7.7
To agree with the relevant Head of ServiceDirector where it appears that a budget proposal,
including a virement proposal, may impact materially on another service area or Head of
Service’sDirectors level of service activity.
19
APPENDIX 5
Financial Planning
Appendix B
2.8
Budgets and the Medium-Term Financial Strategy (MTFS)
2.8.1
2.8.1.1
The Council is a complex organisation responsible for delivering a wide variety of services.
It needs to plan effectively and to develop systems to enable scarce resources to be allocated
in accordance with carefully weighed priorities. The budget is the financial expression of the
Council’s plans and policies.
2.8.1.2
A report on new proposals should explain the full financial implications, following
consultation with the Head of Financial ServicesDirector of Resources. Unless the Council
or Finance and Corporate Services Committee has agreed otherwise, Heads of
ServiceDirectors must plan to contain the financial implications of such proposals within the
relevant financial limit.
2.8.1.3
The revenue budget must be constructed so as to ensure that resource allocation properly
reflects the business plans and priorities of the Council. Budgets (spending plans) are needed
so that the Council can plan, authorise, monitor and control the way money is allocated and
spent. It is illegal for a Council to budget for a deficit.
2.8.1.4
The annual strategic and financial planning process involves a cycle in which Heads of
Service Directors develop their own plans for the submission to the relevant Committee. As
each year passes, another future year will be added to the MTFS. This ensures that the
Council is always preparing for events in advance.
2.9
Key controls
2.9.1
The key controls for budgets and the MTFS are:
a) specific budget approval for all expenditure;
b) budget managers are consulted in the preparation of the budgets for which they will be
held responsible and accept accountability within delegations set by the Council for their
budgets and the level of service to be delivered;
c) a monitoring process is in place to review regularly the effectiveness and operation of
budget preparation and to ensure that any corrective action is taken.
2.10
2.10.1
To prepare and submit reports on budget prospects to the Finance and Corporate Services
Committee including resource constraints set by the Government. Reports should take
account of medium-term prospects, where appropriate.
2.10.2
To determine the detailed form of revenue estimates and the methods for their preparation.
2.10.3
To advise on the medium-term implications of spending decisions.
2.10.4
To encourage the best use of resources and value for money by working with Heads of
ServiceDirectors to identify opportunities to improve economy, efficiency and effectiveness,
and by encouraging good practice in conducting financial appraisals of development or
savings options, and in developing financial aspects of service planning.
2.11
Responsibilities of Chief Finance Officer
20
APPENDIX 5
Financial Planning
Appendix B
2.11.12.10.5
To advise the Council on proposals in accordance with his/her responsibilities
under section 151 of the Local Government Act 1972.
2.1211
2.1211.1
To prepare estimates of income and expenditure, in consultation with the Head of
Financial ServicesDirector of Resources.
2.1211.2
To prepare budgets that are consistent with any relevant financial limits, with the
Council’s annual budget cycle and with guidelines issued by the Head of Financial
2.1211.3
To integrate financial and budget plans into business planning, so that budget plans can
be supported by financial and non-financial performance measures.
2.1211.4
In consultation with the Head of Financial ServicesDirector of Resources and in
accordance with the laid-down guidance and timetable, to prepare detailed draft revenue and
capital budgets for consideration by the Finance and Corporate Services Committee.
2.1211.5
2.1312
2.1312.1
When drawing up draft budget requirements, to have regard to:
a)
spending patterns and pressures revealed through the budget monitoring process;
b)
legal requirements;
c)
requirements as defined by the Council in the Strategic and Financial Policy Process;
d)
initiatives already under way and any new service requirements that are likely to
require funding within the financial year in question.
Resource allocation
2.1312.1.1
A mismatch often exists between available resources and required resources. A
common scenario is that available resources are not adequate to fulfil need/desire. It is
therefore imperative that needs/desires are carefully prioritised, taking account of the
Council’s legal responsibilities and that resources are allocated to meet the urgent priorities.
Resources may include staff, money, equipment, goods and materials.
2.1413
2.1413.1
Key controls
The key controls for resource allocation are:
a) resources are acquired in accordance with the law and using an approved authorisation
process;
b) resources are used only for the purpose intended, to achieve the approved policies and
objectives, and are properly accounted for;
c) resources are securely held for use when required;
d) resources are used with the most efficient manner.
2.1514
21
APPENDIX 5
Financial Planning
Appendix B
2.14.1
To coordinate the Strategic and Financial Planning process to ensure that resources are
devoted to the Council’s stated priorities.
2.1514.2
To advise on methods available for the funding of expenditure plans.
2.1615
2.1615.1
To deliver the Council’s key objectives within budget limits and to utilise resources
allocated, and further allocate resources, in the most efficient, effective and economic way.
2.1615.2
To identify opportunities to minimise or eliminate resource requirements or
consumption without having a detrimental effect on service delivery.
2.1716
Capital programmes
2.1716.1
2.1716.1.1
Capital expenditure involves acquiring or enhancing or maintaining fixed assets with a
long-term value to the Council, such as land, buildings, and major items of plant, equipment
or vehicles. Capital assets shape the way services are delivered in the long term and create
financial commitments for the future in the form of financing costs and revenue running
costs.
2.1716.1.2
The Government controls the financing capacity of the Council through the CIPFA
Prudential Code. This means that capital expenditure should be integrated into the Council’s
Treasury Management Strategy and should be carefully prioritised in order to maximise the
benefit of scarce resources.
2.1817
Key controls
2.1817.1
The key controls for capital programmes are:
a)
the development and implementation of asset management plans;
b)
specific approval by the Council for the programme of capital expenditure;
c)
a scheme and estimate, including project plan, progress targets and associated revenue
expenditure is prepared for each capital project, for approval by the Finance and
Corporate Services Committee;
d)
proposals for improvements and alterations to buildings must be approved by the
relevant Head of ServiceDirector;
e)
accountability for each capital project is accepted by a named manager;
f)
monitoring of progress in conjunction with expenditure and comparison with approved
budget;
g)
capital spending plans are to be in line with the approved Capital Strategy.
2.1918
2.1918.1
To prepare the capital programme and estimates jointly with Heads of ServiceDirectors
and to report them to the Finance and Corporate Services Committee for approval. The
Finance and Corporate Services Committee will make recommendations on the capital
programme and on any associated financing requirements to the Council.
22
APPENDIX 5
Financial Planning
Appendix B
2.1918.2
To prepare and submit quarterly reports jointly with the officers defined as accountable
for capital projects to the Finance and Corporate Services Committee on the progress of the
capital programme compared with the approved estimates.
2.18.3
Having regard to regulations determine the definition of 'capital'.
2.20
Responsibilities of Head of Organisational Development
2.20.1
To issue guidance on project management and project appraisal techniques.
2.2119
2.2119.1
To comply with guidance concerning capital schemes and controls issued by the Head
2.2119.2
To prepare and submit quarerly reports jointly with the Head of Financial
ServicesDirector of Resources to the Finance and Corporate Services Committee on the the
progress of the capital programme compared with the approved estimates.
2.2119.3
To prepare regular reports reviewing the capital programme provisions for their
services. In consultation with the Head of Financial ServicesDirector of Resources, to obtain
authorisation from the Finance and Corporate Services Committee and/or the Council for
individual schemes where the estimated expenditure exceeds the capital programme
provision by more than a specified amount (see Appendix F).
2.2119.4
To ensure that all capital proposals have undergone a project appraisal in accordance
with guidance issued by the Head of Organisation DevelopmentDirector of Resources.
2.2119.5
To ensure that adequate records are maintained for all capital contracts.
2.2119.6
programme.
To proceed with projects only when there is adequate provision in the capital
2.2119.7
To prepare and submit reports, jointly with the Head of Financial ServicesDirector of
Resources, to the Standing Committees, of any increase in contract costs in excess of the
approved scheme and estimate, unless the excess can be met by virement from elsewhere
within the capital programme. The authorisation limits for capital virements are set out in
Appendix F.
2.2119.8
To prepare and submit reports, jointly with the Head of Financial ServicesDirector of
Resources, to the Standing Committees, where it appears that the final cost of a revenue or
capital contract will exceed the approved contract sum by more than a specified financial
limit (see Appendix F).
2.2119.9
No leasing arrangements as defined by the Head of Financial ServicesDirector of
Resources shall be entered into without prior approval.
3.
MAINTENANCE OF RESERVES
3.1
23
APPENDIX 5
Financial Planning
Appendix B
3.1.1
The Council must decide the level of general reserves it wishes to maintain before it can
decide the level of council tax. Reserves are maintained as a matter of prudence. They enable
the Council to provide for unexpected events and thereby protect it from overspending,
should such events occur. Reserves for specific purposes may also be maintained, such as
the purchase or renewal of capital items.
3.2
Key controls
3.2.1
To maintain reserves in accordance with the Code of Practice on Local Authority
Accounting in the United Kingdom and agreed accounting policies.
3.2.2
For each reserve established, the purpose, usage and basis of transactions should be clearly
identified and approved by the Finance and Corporate Services Committee.
3.3
3.3.1
To advise the Finance and Corporate Services Committee and/or the Council on prudent
levels of reserves for the Council.
3.4
3.4.1
To ensure that resources are used only for the purposes for which they were intended.
24
APPENDIX 5
Appendix C
1.
RISK MANAGEMENT
1.1
1.1.1
All organisations, whether private or public sector, face risks to people, property and
continued operations. Risk is the chance or possibility of loss, damage, injury or failure to
achieve objectives caused by an unwanted or uncertain action or event. Risk management is
the planned and systematic approach to the identification, evaluation and control of risk. Its
objectives are to secure the assets of the organisation and to ensure the continued financial
and organisational well-being of the organisation. In essence it is, therefore, an integral part
of good business practice. Risk management is concerned with evaluating the measures an
organisation already has in place to manage identified risks and then recommending the
action the organisation needs to take to control these risks effectively.
1.1.2
It is the overall responsibility of the Council to approve the Council’s risk management
strategy, and to promote a culture of risk management awareness throughout the Council.
1.2
Key controls
1.2.1
The key controls for risk management are:
a)
procedures are in place to identify, assess, prevent or contain material known risks, and
these procedures are operating effectively throughout the Council;
b)
a monitoring process is in place to review regularly the effectiveness of risk reduction
strategies and the operation of these controls. The risk management process should be
conducted on a continuing basis, through a risk management group;
c)
managers know that they are responsible for managing relevant risks and are provided
with relevant information on risk management initiatives;
d)
provision is made for losses that might result from the risks that remain;
e)
procedures are in place to investigate claims within required timescales
f)
acceptable levels of risk are determined and insured against where appropriate;
g)
the Council has identified business continuity plans for implementation in the event of
disaster that results in significant loss or damage to its resources.
1.3
Responsibilities of the Head of Organisational DevelopmentDirector of Resources
1.3.1
To prepare and promote the Council’s Risk Management Strategy StatementPolicy.
1.3.2
To develop risk management controls in conjunction with Heads of ServiceDirectors.
1.4
1.4.1
To include all appropriate employees of the Council in a suitable fidelity guarantee
insurance.
1.4.2
To effect corporate insurance cover, through external insurance and internal funding, and to
negotiate all claims in consultation with other officers, where necessary.
25
APPENDIX 5
Appendix C
1.5
1.5.1
To notify the Head of Financial ServicesDirector of Resources immediately of any loss,
liability or damage that may lead to a claim against the Council, together with any
information or explanation required by the Council’s insurers.
1.5.2
To take responsibility for risk management, having regard to advice from the Head of
Organisational DevelopmentDirector of Resources and other specialist officers (e.g. fire
prevention, health and safety).
1.5.3
To ensure that there are regular reviews of risk within their Service.
1.5.4
To notify the Head of Financial ServicesDirector of Resources promptly of all new risks,
properties or vehicles that require insurance and of any alterations affecting existing
insurances.
1.5.5
To consult the Head of Financial ServicesDirector of Resources and the Council’s legal
advisors on the terms of any indemnity that the authority is requested to give.
1.5.6
To ensure those employees, or anyone covered by the Council’s insurances, do not admit
liability or make any offer to pay compensation that may prejudice the assessment of
liability in respect of any insurance claim.
2.
INTERNAL CONTROLS
2.1
2.1.1
The Council is complex and beyond the direct control of a single individual. It therefore
requires internal controls to manage and monitor progress towards strategic objectives.
2.1.2
The Council has statutory obligations, and, therefore, requires internal controls to identify,
meet and monitor compliance with these obligations.
2.1.3
The Council faces a wide range of financial, administrative and commercial risks, both from
internal and external factors, which threaten the achievement of its objectives. Internal
controls are necessary to manage these risks.
2.1.4
The system of internal controls is established in order to provide measurable achievement of:
a)
efficient and effective operations;
b)
reliable financial information and reporting;
c)
compliance with laws and regulations;
d)
risk management.
2.2
Key controls
2.2.1
The key controls and control objectives for internal control systems are:
a)
key controls should be reviewed on a regular basis;
26
APPENDIX 5
Appendix C
b)
managerial control systems, including defining policies, setting objectives and plans,
monitoring financial and other performance and taking appropriate anticipatory and
remedial action. The key objective of these systems is to promote ownership of the
control environment by defining roles and responsibilities;
c)
financial and operational control systems and procedures, which include physical
safeguards for assets, segregation of duties, authorisation and approval procedures and
information systems;
d)
an effective internal audit function that is properly resourced. It should operate in
accordance with the principles contained in the Auditing Practices Board’s auditing
guideline Guidance for Internal Auditors, CIPFA’s Code of Practice for Internal Audit
in Local Government in the United Kingdom and with any other statutory obligations
and regulations.
2.3
Responsibilities of the Head of Organisational DevelopmentDirector of Resources
2.3.1
To assist the Council to put in place an appropriate control environment and effective
internal controls which provide reasonable assurance of effective and efficient operations,
financial stewardship, probity and compliance with laws and regulations.
2.4
2.4.1
To manage processes to check that established controls are understood and being adhered to
and to evaluate their effectiveness, in order to be confident in the proper use of resources,
achievement of objectives and management of risks.
2.4.2
To review existing controls in the light of changes affecting the Council and to establish and
implement new ones in line with guidance from the Head of Organisational
DevelopmentDirector of Resources. Heads of ServiceDirectors should also be responsible,
after consultation with the Head of Organisational DevelopmentDirector of Resources, for
removing controls that are unnecessary or not cost or risk effective – for example, because of
duplication.
3.
AUDIT REQUIREMENTS
3.1
Internal audit
3.1.1
3.1.1.1
The Accounts and Audit (Amendment) (England) Regulations 2006 require that a “relevant
body shall maintain an adequate and effective system of internal audit of its system of
internal control in accordance with proper practices in relation to internal control”.
3.1.1.2
Internal Audit must be seen as independent. This is achieved through operating within a
framework that allows unrestricted access to senior management, reporting in its own name
and segregation as far as practical from line operations. The function reports directly to the
Chief Finance OfficerDirector of Resources (also the officer designated under Section 151 of
the Local Government Act5 1972 as responsible for ensuring the proper administration of
the Authority’s financial affairs). Internal Audit also reports directly to the Audit
Committee.
3.2
Key controls
3.2.1
The key controls for internal audit are:
27
APPENDIX 5
Appendix C
a)
that it is independent in its planning and operation;
b)
the Business Improvement ManagerAudit Manager has direct access to the Chief
Executive, Chief Finance OfficerDirector of Resources, all levels of management and
directly to elected Members;
c)
Internal Auditors work towards complying with the CIPFA Code of Practice for Internal
Audit in Local Government in the United Kingdom (2006), and effort is made to
preserve objectivity by ensuring staff are free from conflicts of interest. Therefore as
far as is practical, Internal Audit will not participate in the day to day operation of any
systems of internal financial control.
3.3
3.3.1
To ensure that internal auditors have the authority to:
a)
access Council premises at reasonable times;
b)
access all assets, records, documents, correspondence and control systems ;
c)
receive any information and explanation considered necessary concerning any matter
under consideration;
d)
require any employee of the Council to account for cash, materials or any other asset
under his/her control;
e)
access records belonging to third parties, such as contractors, when required;
f)
direct access to the Finance and Corporate Services Committee and the Audit
Committee.
3.3.2
To approve the annual audit plans, prepared by the Head of Organisational
DevelopmentAudit Manager, and present to the Audit Committee for their approval.
3.4
Responsibilities of the Head of Organisational Development
3.4.1
To prepare an annual audit plan which takes account of the characteristics and relative risks
of the activities involved for approval by the Chief Finance Officer and the Audit
Committee.
3.4.23.3
To prepare terms of reference for the internal audit function, for approval by the Chief
Finance OfficerDirector of Resources and Audit Committee.
3.4.33.4
To ensure that effective procedures are in place to investigate promptly any fraud or
irregularity.
3.54
3.54.1
To ensure that internal auditors are given access at all reasonable times to premises,
personnel, documents and assets that the auditors consider necessary for the purposes of
their work.
3.54.2
To ensure that auditors are provided with any information and explanations that they seek in
the course of their work.
3.54.3
To respond to internal and external audit reports in writing, within a timescale agreed by the
appropriate Head of ServiceDirector and the Head of Organisational DevelopmentDirector
of Resources or External Auditor, detailing the action intended to address any
recommendations.
28
APPENDIX 5
Appendix C
3.54.4
To ensure that any agreed actions arising from audit recommendations are carried out in a
timely and efficient fashion.
3.54.5
To ensure that their staff report any suspicion of fraud, corruption or other financial
irregularity in respect of Council funds, either directly, or via the Head of ServiceDirectors
to the Head of Organisational DevelopmentDirector of Resources for investigation.
3.54.6
The Head of Organisational DevelopmentDirector of Resources must then arrange for
appropriate investigation of the matter. The relevant Head of ServiceDirector must agree any
further investigative action with the Head of Organisational DevelopmentDirector of
Resources before proceeding.
3.54.7
The Head of Organisational DevelopmentDirector of Resources, in consultation with the
relevant Head of ServiceDirector, the Monitoring Officer and the Chief Finance Chief
ExecutiveOfficerDirector of Resources will advise whether any matter should be referred to
the police for further investigation.
3.54.8
To ensure that the Head of Organisational DevelopmentDirector of Resources is given an
opportunity, in a timely manner before live operation, to evaluate the adequacy of new
systems for maintaining financial records, or records of assets, or changes to such systems.
3.65
External audit
3.65.1
3.65.1.1
The Local Government Finance Act 1982 set up the Audit Commission, which is
responsible for appointing external auditors to each local authority in England and Wales.
The external auditor has rights of access to all documents and information necessary for
audit purposes.
3.65.1.2
The basic duties of the external auditor are defined in the Audit Commission Act 1998
and the Local Government Act 1999. In particular, section 4 of the 1998 Act requires the
Audit Commission to prepare a code of audit practice, which external auditors follow when
carrying out their duties. The code of audit practice sets out the auditor’s objectives to
review and report upon:
a)
the financial aspects of the audited body’s corporate governance arrangements;
b)
the audited body’s financial statements;
c)
Conclusions on arrangements for securing economy, efficiency and effectiveness in the
use of resources.
3.65.1.3
The Council’s accounts are scrutinised by external auditors, who must be satisfied that
the Statement of Accounts ‘presents fairly’ the financial position of the Council and its
income and expenditure for the year in question and complies with the legal requirements.
3.76
Key controls
3.76.1
External auditors are appointed by the Audit Commission normally for a minimum period of
five years. The Audit Commission prepares a code of audit practice, which external auditors
follow when carrying out their audits.
3.87
29
APPENDIX 5
Appendix C
3.87.1
To ensure that external auditors are given access at all reasonable times to premises,
personnel, documents and assets that the external auditors consider necessary for the
purposes of their work.
3.87.2
To work with the external auditor and advise the Council, and Heads of ServiceDirectors on
their responsibilities in relation to external audit.
3.9
3.9.17.3
3.108
To ensure there is effective liaison between external and internal audit.
3.108.1 To ensure that external auditors are given access at all reasonable times to premises,
personnel, documents and assets which the external auditors consider necessary for the
purposes of their work.
3.108.2 To ensure that all records and systems are up to date and available for inspection.
4.
PREVENTING FRAUD AND CORRUPTION
4.1
Why is it this important?
4.1.1
The Council will not tolerate fraud and corruption in the administration of its
responsibilities, whether from inside or outside the Council.
4.1.2
The Council’s expectation of propriety and accountability is that Members and staff at all
levels will lead by example in ensuring adherence to legal requirements, rules, procedures
and practices.
4.1.3
The Council also expects that individuals and organisations (e.g. suppliers, contractors,
service providers) with whom it comes into contact will act towards the Council with
integrity and without thought or actions involving fraud and corruption. It must guard
against the possibility that these expectations will not be fulfilled in all respects.
4.2
Key controls
4.2.1
The key controls regarding the prevention of financial irregularities are that:
a)
the Council has an effective Anti-Fraud and Anti-Corruption Policy and maintains a
culture that will not tolerate fraud or corruption;
b)
all Members and staff act with integrity and lead by example as per the relevant Code
of Conduct;
c)
Managers are required to deal swiftly and firmly with those who defraud or attempt to
defraud the Council or who are corrupt;
d)
high standards of conduct are promoted amongst Members by the standards
committee;
e)
the maintenance of a register of interests in which any hospitality or gifts accepted
must be recorded;
f)
“whistle blowing” procedures are in place and operate effectively;
g)
legislation including the Public Interest Disclosure Act 1998 is adhered to.
30
APPENDIX 5
Appendix C
4.3
Responsibilities of the Director of Planning and Regulatory ServicesHead of
Organisational Development
4.3.1
To maintain and review an Anti-Fraud and Anti-Corruption Policy.
4.4
Responsibilities of the Director of Resources
4.4.1
To maintain and review an Anti-Corruption Policy
4.34.2
To maintain adequate and effective internal control arrangements.
4.34.3
To ensure that all suspected irregularities are investigated and all proven irregularities
reported to the Chief Executive Chief Finance OfficerDirector of Resources.
4.45
4.45.1
To ensure that all suspected irregularities are reported to the Head of Organisational
Development.Director of Resources
4.45.2
To instigate the Council’s disciplinary procedures where the outcome of an audit
investigation indicates improper behaviour.
4.45.3
To ensure that where financial impropriety is discovered, the Head of Financial
ServicesDirector of Resources is informed. Where sufficient evidence exists to believe that
a criminal offence may have been committed, after consultation with the Head of
Organisational DevelopmentDirector of Resources, relevant Head of ServiceDirector and
Chief Executive/Strategic Director, to ensure that the Police are called in.
4.56
Responsibility of the Monitoring Officer
4.56.1
To maintain a register of interests.
5.
ASSETS
5.1
Security
5.1.1
5.1.1.1
The Council holds assets in the form of property, vehicles, equipment, furniture and other
items worth millions of pounds. It is important that assets are safeguarded and used
efficiently in service delivery, and that there are arrangements for the security of both assets
and information required for service operations. An up-to-date asset register is a prerequisite
for proper fixed asset accounting and sound asset management.
5.2
Key controls
5.2.1
The key controls for the security of resources such as land, buildings, fixed plant machinery,
equipment, software and information are:
a)
resources are used only for the purposes of the Council and are properly accounted for;
b)
resources are available for use when required;
c)
resources no longer required are disposed of in accordance with the law and the
regulations of the Council so as to maximise benefits;
31
APPENDIX 5
Appendix C
d)
an asset register is maintained for the Council, assets are recorded when they are
acquired by the Council and this record is updated as changes occur with respect to the
location and condition of the asset;
e)
all staff are aware of their responsibilities with regard to safeguarding the Council’s
assets and information, including the requirements of the Data Protection Act and
software copyright legislation;
f)
all staff are aware of their responsibilities with regard to safeguarding the security of the
Council’s Information Communication Technology (ICT) Systems, including
maintaining restricted access to the information held on them and compliance with the
Council’s Information Communication Technology and internet security policies.
5.3
5.3.1
To ensure that an asset register is maintained in accordance with good practice for all fixed
assets with a value in excess of a specified financial limit (see Appendix F). The function of
the asset register is to provide the Council with information about fixed assets so that they
are:
a)
safeguarded;
b)
used efficiently and effectively;
c)
adequately maintained.
5.3.2
To receive the information required for accounting, costing and financial records from each
Head of ServiceDirector.
5.3.3
To ensure that assets are valued in accordance with the Code of Practice on Local Authority
Accounting in the United Kingdom.
5.4
5.4.1
A property database shall be maintained by the Head of Financial ServicesDirector of
Resources for all properties, plant and machinery and moveable assets currently owned or
used by the Council subject to the minimum values specified in Appendix F. Any use of
property by a service other than for direct service delivery should be supported by
documentation identifying terms, responsibilities and duration of use.
5.4.2
To ensure that lessees and other prospective occupiers of council owned land are not allowed
to take possession or enter the land until a lease or agreement, in a form approved by the
Council’s legal advisor, has been established.
5.4.3
To ensure the proper security of all buildings and other assets under their control in
accordance with laid down guidelines.
5.4.4
Where land or buildings are surplus to requirements, a recommendation for sale should be
the subject of a joint report by the Head of ServiceDirector and the Head of Financial
ServicesDirector of Resources (see Appendix F).
5.4.5
To pass title deeds to the Head of Customer & Democratic ServicesMonitoring Officer who
is responsible for maintaining the central repository of all title deeds.
5.4.6
To ensure that no Council asset is subject to personal use by a Member or employee without
prior agreement of the relevant Head of ServiceDirector.
32
APPENDIX 5
Appendix C
5.4.7
To ensure the safe custody of vehicles, equipment, furniture, stock, stores and other property
belonging to the Council.
5.4.8
To ensure that an inventory is maintained of moveable assets (subject to limits in Appendix
F) in accordance with arrangements defined by the Head of Organisational
DevelopmentCorporate Leadership Team.
5.4.9
To ensure that assets are identified, their location recorded and that they are appropriately
marked and insured.
5.4.10
To consult the Head of Financial ServicesDirector of Resources in any case where security is
thought to be defective or where it is considered that special security arrangements may be
needed.
5.4.11
To ensure cash holdings on premises are kept to a minimum.
5.4.12
To ensure that keys to safes and similar receptacles are carried on the person of those
responsible at all times; loss of any such keys must be reported to the Head of Financial
ServicesDirector of Resources as soon as possible.
5.4.13
To record all disposals or part exchange of assets that should normally be by competitive
tender or public auction in accordance with Contract Procedure Rules, unless, the Finance
and Corporate Services Committee agrees otherwise.
5.4.14
To ensure that all employees are aware that they have a personal responsibility with regard
to the protection and confidentiality of information, whether held in manual or computerised
records. Information may be sensitive or privileged, or may possess some intrinsic value,
and its disclosure or loss could result in a cost to the Council in some way.
5.4.15
To maintain inventories and record an adequate description of furniture, fittings, equipment,
plant and machinery above a specified financial limit in value (see Appendix F).
5.4.16
To carry out an annual check of all items on the inventory in order to verify location and
condition and to take action in relation to surpluses or deficiencies, annotating the inventory
accordingly. Attractive and portable items such as computers and cameras should be
identified with security markings as belonging to the Council.
5.4.17
To make sure that property is only used in the course of the Council’s business, unless the
Head of ServiceDirector concerned has given permission otherwise.
5.5
Asset disposal
5.5.1
5.5.1.1
It would be uneconomic and inefficient for the cost of assets to outweigh their benefits.
Obsolete, non-repairable or unnecessary resources should be disposed of in accordance with
the law and the regulations of the Council.
5.6
Key controls
5.6.1
Assets for disposal are identified and are disposed of at the most appropriate time, and only
when it is in the best interests of the Council, and best price is obtained in accordance with
Contract Procedure Rules and bearing in mind other factors, such as environmental issues.
5.6.2
Procedures protect staff involved in the disposal from accusations of personal gain.
33
APPENDIX 5
Appendix C
5.7
5.7.1
To issue advice on disposal in accordance with Contract Procedure Rules.
5.7.2
To ensure appropriate accounting entries are made to remove the value of disposed assets
from the Council’s records and to include the sale proceeds if appropriate.
6.
TREASURY MANAGEMENT
6.1
6.1.1
Millions of pounds pass through the Council’s accounts each year. This requires the
establishment of codes of practice. These aim to provide assurances that the Council’s
money is properly managed in a way that balances risk with return, but with the overriding
consideration being given to the security of the Council’s investment.
6.2
Key controls
6.2.1
That the Council’s borrowings and investments comply with the CIPFA Code of Practice on
Treasury Management and with the Council’s treasury management practices (TMP’s).
6.2.2
That the Finance & Corporate Services Committee receives reports on Treasury activity at
least twice a year in accordance with the code of practice and that the Treasury Management
Strategy is subject to annual scrutiny before it is agreed.
6.3
Responsibilities of Head of Financial ServicesDirector of Resources – treasury
management and banking
6.3.1
To arrange the borrowing and investments of the Council in such a manner as to comply
with the CIPFA Code of Practice on Treasury Management and the Council’s treasury
management practices and strategy.
6.3.2
To prepare reports for the consideration of the Finance & Corporate Services and Overview
& Scrutiny Committees.
6.3.3
To operate bank accounts as are considered necessary – opening or closing any bank account
shall require the written approval of the Head of Financial ServicesDirector of Resources in
accordance with the Banking Mandate (Appendix G).
6.4
Responsibilities of Heads of ServiceDirectors – treasury management and banking
6.4.1
To follow the instructions on banking issued by the Head of Financial ServicesDirector of
Resources.
6.5
Responsibilities of Head of Financial ServicesDirector of Resources – investments and
borrowing
6.5.1
To ensure that all investments of money are made in the name of the Council.
6.5.2
To ensure that all securities that are the property of the Council and the title deeds of all
property in the Council’s ownership are held in the custody of the Head of Planning
ServicesMonitoring Officer or under arrangements approved by the Head of Financial
34
APPENDIX 5
Appendix C
6.5.3
To effect all borrowings in the name of the Council.
6.5.4
To maintain records of all borrowing of money by the Council.
6.6
Responsibilities of Heads of ServiceDirectors – investments and borrowing
6.6.1
To ensure that loans are not made to third parties and that interests are not acquired in
companies, joint ventures or other enterprises without the approval of the Council.
6.7
Responsibilities of Heads of ServiceDirectors – funds held for third parties
6.7.1
To arrange, where funds are held on behalf of third parties, for their secure administration,
approved by the Director of ResourcesHead of Organisational Development, and to maintain
written records of all transactions.
6.8
Responsibilities of the Head of Financial ServicesDirector of Resources – imprest
accounts
6.8.1
To provide employees of the Council with cash imprest accounts to meet minor expenditure
on behalf of the Council and to prescribe rules for operating these accounts. Minor items of
expenditure should not exceed the prescribed amount.
6.8.2
To determine the petty cash limit and to maintain a record of all transactions and petty cash
advances made, and periodically to review the arrangements for the safe custody and control
of these advances.
6.8.3
To reimburse imprest holders, as often as necessary, to restore the imprests.
6.9
Responsibilities of Heads of ServiceDirectors – imprest accounts
6.9.1
To ensure that employees operating an imprest account:
a)
obtain and retain vouchers to support each payment from the imprest account. Where
appropriate, an official receipted VAT invoice must be obtained;
b)
make adequate arrangements for the safe custody of the account;
c)
produce upon demand by the Head of Financial ServicesDirector of Resources cash
and all vouchers to the total value of the imprest amount;
d)
record transactions promptly;
e)
reconcile and balance the account at least monthly; reconciliation sheets to be signed
and retained by the imprest holder;
f)
provide the Head of Financial ServicesDirector of Resources with a certificate of the
value of the account held at 31 March each year;
g)
ensure that the float is never used to cash personal cheques or to make personal loans
and that the only payments into the account are the reimbursement of the float and
change relating to purchases where an advance has been made.
7.
STAFFING
7.1
35
APPENDIX 5
Appendix C
7.1.1
In order to provide the highest level of service, it is crucial that the Council recruits and
retains high calibre, knowledgeable staff, qualified to an appropriate level.
7.2
Key controls
7.2.1
The key controls for staffing are:
a)
procedures are in place for forecasting staffing requirements and cost;
b)
controls are implemented that ensure that staff time is used efficiently and to the benefit
of the Council;
c)
checks are undertaken prior to employing new staff to ensure that they are appropriately
qualified, experienced and trustworthy.
7.3
7.3.1
To act as an advisor to Heads of ServiceDirectors on areas such as Income Tax, National
Insurance and pension contributions, as appropriate.
7.3.2
To ensure that staff costs are charged accurately to allow Heads of ServiceDirectors to
monitor staffing budgets effectively.
7.4
7.4.1
To monitor staff activity to ensure adequate control over such costs as sickness, overtime,
training and temporary staff.
7.4.2
To ensure that the staffing budget is not exceeded without due authority and that it is
managed to enable the agreed level of service to be provided.
7.4.3
To ensure that the Head of Financial ServicesDirector of Resources is immediately informed
if the staffing budget is likely to be materially over- or under-spent.
36
APPENDIX 5
Financial Systems and Procedures
Appendix D
1.
GENERAL
1.1
1.1.1
Services have systems and procedures relating to the control of the Council’s assets.
Services are reliant on computers for their financial management information. The
information must therefore be accurate and the systems and procedures sound and well
administered. They should contain controls to ensure that transactions are properly processed
and errors detected promptly.
1.1.2
The Chief Finance OfficerDirector of Resources is responsible for ensuring that the
authority’s financial systems are sound and should therefore be notified of any new
developments or changes.
1.2
Key controls
1.2.1
The key controls for systems and procedures are:
a) basic data exists to enable the Council’s objectives, targets, budgets and plans to be
formulated;
b) performance is communicated to the appropriate managers on an accurate, complete and
timely basis;
c) early warning is provided of deviations from target, plans and budgets that require
management attention;
d) operating systems and procedures are secure.
1.3
1.3.1
To make arrangements for the proper administration of the Council’s financial affairs,
including to:
1.4
a)
issue advice, guidance and procedures for officers and others acting on the Council’s
behalf;
b)
determine the accounting systems, form of accounts and supporting financial records;
c)
establish arrangements for audit of the Council’s financial affairs;
d)
approve any new financial systems to be introduced;
e)
approve any changes to be made to existing financial systems.
1.4.13.2 To ensure that effective contingency arrangements, including back-up procedures, exist for
computer systems. Wherever possible, back-up information should be securely retained in a
fireproof location, preferably off site or at an alternative location within the building.
1.4.23.3 To ensure that, where appropriate, computer systems are registered in accordance with Data
Protection legislation and that staff are aware of their responsibilities under the legislation.
1.54
1.54.1
To ensure that accounting records are properly maintained and held securely.
1.54.2
To ensure that vouchers and documents with financial implications are not destroyed, except
in accordance with arrangements approved by the Head of Financial ServicesDirector of
Resources.
37
APPENDIX 5
Appendix D
1.54.3
To ensure that a complete management trail, allowing financial transactions to be traced
from the accounting records to the original document, and vice versa, is maintained.
1.54.4
To incorporate appropriate controls to ensure that, where relevant:
a)
all input is genuine, complete, accurate, timely and not previously processed;
b)
all processing is carried out in an accurate, complete and timely manner;
c)
output from the system is complete, accurate and timely.
1.54.5
To ensure that the organisational structure provides an appropriate segregation of duties to
provide adequate internal controls and to minimise the risk of fraud or other malpractice.
1.54.6
To ensure there is a documented and tested disaster recovery plan to allow information
system processing to resume quickly in the event of an interruption.
1.54.7
To ensure that systems are documented and staff trained in operations.
1.54.8
To consult with the Head of Financial ServicesDirector of Resources before changing any
existing system or introducing new systems.
1.54.9
In consultation with the Head of Financial ServicesDirector of Resources to establish a
scheme of delegation identifying officers authorised to act upon the Head of
Service’sDirectors behalf in respect of payments, income collection and placing orders,
including variations, and showing the limits of their authority.
1.54.10 To supply lists of authorised officers, with specimen signatures and delegated limits, to the
Head of Financial ServicesDirector of Resources, together with any subsequent variations.
1.54.11 To ensure that relevant standards and guidelines for ICT systems issued by the Head of
Organisational DevelopmentDirector of Resources or IT Manager are observed.
1.54.12 To ensure that computer equipment and software are protected from loss and damage
through theft, vandalism, etc.
1.54.13 To comply with the copyright, designs and patents legislation and, in particular, to ensure
that:
a)
only software legally acquired and installed by the Council is used on its computers;
b)
staff are aware of legislative provisions;
c)
in developing systems, due regard is given to the issue of intellectual property rights.
2.
INCOME AND EXPENDITURE
2.1
Income
2.1.1
2.1.1.1
Income can be a vulnerable asset and effective income collection systems are necessary to
ensure that all income due is identified, collected, receipted and banked properly. It is
preferable to obtain income in advance of supplying goods or services as this improves the
Council’s cash-flow and also avoids the time and cost of administering debts.
38
APPENDIX 5
Appendix D
2.2
Key controls
2.2.1
The key controls for income are:
a)
all income due to the Council is identified and charged correctly, in accordance with
an approved charging policy, which is regularly reviewed;
b)
all income is collected from the correct person, at the right time, using the correct
procedures and the appropriate stationery;
c)
all money received by an employee on behalf of the Council is paid in without delay
through the Council’s payment facility, as the Head of Financial ServicesDirector of
Resources directs, to the Council’s bank account, and properly recorded. The
responsibility for cash collection should be separated from that:
i.
ii.
for identifying the amount due
for reconciling the amount due to the amount received
d)
effective action is taken to pursue non-payment within defined timescales;
e)
formal approval for debt write-off is obtained;
f)
appropriate write-off action is taken within defined timescales;
g)
appropriate accounting adjustments are made following write-off action;
h)
all appropriate income documents are retained and stored for the defined period in
accordance with the document retention guidelines;
i)
money collected and deposited is reconciled to the bank account by a person who is
not involved in the collection or banking process.
2.3
2.3.1
To agree arrangements for the collection of all income due to the Council and to approve the
procedures, systems and documentation for its collection.
2.3.2
To approve all debts to be written off in consultation with the relevant Head of
ServiceDirector and to keep a record of all sums written off up to the approved limit and to
adhere to the requirements of the Accounts and Audit Regulations 2003.
2.3.3
To obtain the approval of the Finance and Services Committee in consultation with the
relevant Head of ServiceDirector for writing off debts in excess of a specified financial limit
(see Appendix F)
2.3.4
To ensure that appropriate accounting adjustments are made following write-off action.
2.3.5
To order and supply to services all receipt forms, books or tickets and similar items and to
satisfy himself/herself regarding the arrangements for their control.
2.4
2.4.1
To implement the charging policy for the supply of goods or services, including the
appropriate charging of VAT (in consultation with the Head of Financial ServicesDirector of
Resources where appropriate), and to review it regularly, in line with corporate policies.
2.4.2
To separate the responsibility for identifying amounts due and the responsibility for
collection, as far as is practicable.
39
APPENDIX 5
Appendix D
2.4.3
To establish and initiate appropriate recovery procedures, including legal action where
necessary, for debts that are not paid promptly.
2.4.4
To issue official receipts or to maintain other documentation for income collection.
2.4.5
To ensure that at least two employees are present when post is opened so that money
received by post is properly identified and recorded.
2.4.6
To hold securely receipts, tickets and other records of income for the appropriate period in
accordance with the documentation retention policy.
2.4.7
To secure all income to safeguard against loss or theft, and to ensure the security of cash
handling.
2.4.8
To ensure that income is paid fully and promptly into the appropriate Council bank account
in the form in which it is received. Appropriate details should be recorded on paying-in slips
to provide an audit trail. Money collected and deposited must be reconciled to the bank
account on a regular basis.
2.4.9
To ensure personal cheques or other payments are not en-cashed.
2.4.10
To supply the Head of Financial ServicesDirector of Resources with details relating to work
done, goods supplied, services rendered or other amounts due, to enable the Head of
Financial ServicesDirector of Resources to record correctly the sums due to the Council and
to ensure accounts are sent out promptly. Heads of ServiceDirectors have a responsibility to
assist the Head of Financial ServicesDirector of Resources in collecting debts that they have
originated, by providing any further information requested by the debtor, and in pursuing the
matter on the Council’s behalf.
2.4.11
To notify the Head of Financial ServicesDirector of Resources of outstanding income
relating to the previous financial year as soon as possible after 31st March in line with the
timetable determined by the Head of Financial ServicesDirector of Resources and not later
than 30th April.
3.
ORDERING AND PAYING FOR WORK, GOODS AND SERVICES
3.1
3.1.1
Public money should be spent with demonstrable probity and in accordance with the
Council’s policies. Authorities have a statutory duty to achieve best value in part through
economy and efficiency. The Council’s procedures should help to ensure that services obtain
value for money from their purchasing arrangements. These procedures should be read in
conjunction with the Council’s Contract Procedure Rules.
3.2
General
3.2.1
Every Officer and Member of the Council has a responsibility to declare any links or
personal interests that they may have with purchasers, suppliers and/or contractors if they
are engaged in contractual or purchasing decisions on behalf of the Council, in accordance
with appropriate codes of conduct.
3.2.2
Official orders must be in a form approved by the Head of Financial ServicesDirector of
Resources. Official orders must be issued for all work, goods or services to be supplied to
the Council, except for supplies of utilities, periodic payments, petty cash purchases or
other exceptions specified by the Head of Financial ServicesDirector of Resources.
40
APPENDIX 5
Appendix D
3.3.3
Each order must conform to the guidelines approved by the Council on procurement
Standard terms and conditions and must not be varied without the prior approval of the Head
3.3.4
Apart from petty cash, the normal method of payment from the Council shall be by cheque
or BACS drawn on the Council’s bank account by the Head of Financial ServicesDirector of
Resources. The use of direct debit shall require the prior agreement of the Head of Financial
ServicesDirector of Resources. The use of Council procurement/business cards by non card
holders shall require the prior agreement of the Head of Financial ServicesDirector of
Resources.
3.3.5
Official orders must not be raised for any personal or private purchases, nor must personal or
private use be made of Council contracts, except where there is a specific Council policy to
the contrary.
3.3.6
Detailed regulations relating to Procurement are set out in the Council’s Contract Procedure
Rules.
3.3.7
Where an order is not appropriate as discussed in section 3.2.2, authorisation must be
provided on the specified form and attached to the invoice for payment. Authorisation
thresholds for Officers are set out in Appendix H.
3.3
Key controls
3.3.1
The key controls for ordering and paying for work, goods and services are:
a)
all goods and services are ordered only by authorised persons and are correctly
recorded;
b)
all goods and services shall be ordered in accordance with the Council’s Contract
Procedures Rules;
c)
goods and services received are checked to ensure they are in accordance with the order.
Goods should not be received by the person who placed the order;
d)
payments are not made unless goods have been received by the Council to the correct
price, quantity and quality standards;
e)
all payments are made to the correct person, for the correct amount and are properly
recorded, regardless of the payment method;
f)
all appropriate evidence of the transaction and payment documents are retained and
stored for the defined period, in accordance with the document retention guidelines;
g)
all expenditure, including VAT, is accurately recorded against the right budget and any
exceptions are corrected by journal;
h)
in addition e-commerce requires that processes are in place to maintain the security and
integrity of data for transacting business electronically.
3.4
3.4.1
To ensure that all the Council’s financial systems and procedures are sound and properly
administered.
3.4.2
To approve any changes to existing financial systems and to approve any new systems
before they are introduced.
3.4.3
To approve the form of official orders and associated terms and conditions in consultation
with the Council’s legal advisors.
41
APPENDIX 5
Appendix D
3.4.4
To make payments from the Council’s funds on the Head of Service’sDirectors authorisation
that the expenditure has been duly incurred in accordance with financial regulations.
3.4.5
To make payments, whether or not provision exists within the estimates, where the payment
is specifically required by statute or is made under a court order.
3.4.6
To make payments to contractors on the certificate of the appropriate Head of
ServiceDirector, which must include details of the value of work, retention money, amounts
previously certified and amounts now certified.
3.4.7
To provide advice and encouragement on making payments by the most economical means,
in accordance with the Council's Procurement Strategy and associated guidance.
3.4.8
To ensure that payment is not made unless a proper VAT invoice, where appropriate, has
been received, checked and coded, confirming:
(a)
that the invoice has not previously been paid;
(b)
that expenditure has been properly incurred;
(c)
that prices and arithmetic are correct;
(d)
correct accounting treatment of tax;
(e)
that discounts have been taken where available;
(f)
that appropriate entries will be made in accounting records.
3.4.9
To ensure that payments are not made on a photocopied or faxed invoice, statement or other
document other than the formal invoice, except where the original invoice has been lost, in
which case a check must be made to see if payment has been made and if it has not the copy
annotated accordingly prior to payment.
3.5
3.5.1
To ensure that official orders are issued via the e-procurement system for all goods and
services, other than the exceptions as specified in 3.2.2.
3.5.2
To ensure that orders are only used for goods and services provided to the service.
Individuals must not use official orders to obtain goods or services for their private use (see
3.3.5).
3.5.3
To ensure that only staff authorised to raise orders (Buyers) via the e-procurements system
have access to the system. To ensure that only staff authorised to approve orders above the
specified limit have access to the system. Buyers and Approvers should be satisfied that the
goods and services ordered are appropriate and needed, that there is adequate budgetary
provision and that quotations or tenders have been obtained if necessary. Best Value
principles should underpin the Council’s approach to procurement. Value for money should
always be achieved.
3.5.4
To ensure that goods and services are checked on receipt to verify that they are in
accordance with the order. This check should, where possible, be carried out by a different
officer from the person who authorised the order. Appropriate entries should then be made in
inventories if necessary.
3.5.5
To ensure that the e-payment system is updated to show the receipt of goods, immediately
after the goods are received.
42
APPENDIX 5
Appendix D
3.5.6
Wherever possible to ensure that two authorised members of staff are involved in the
ordering and receiving process.
3.5.7
To encourage suppliers of goods and services to receive payment by the most economical
means for the Council. It is essential, however, that payments made by direct debit have the
prior approval of the Head of Financial ServicesDirector of Resources.
3.5.8
To ensure that the service obtains best value from purchases by taking appropriate steps to
obtain competitive prices for goods and services of the appropriate quality. Due regard to be
taken of the Council’s procurement strategy and associated procurement guidance.
3.5.9
To ensure that employees are aware of the national code of conduct for local government
employees specified in personnel policies.
3.5.10
To ensure that, loans, leasing or rental arrangements are not entered into without prior
agreement from the Head of Financial ServicesDirector of Resources.
3.5.11
To notify the Head of Financial ServicesDirector of Resources of outstanding expenditure
relating to the previous financial year as soon as possible after 31st March in line with the
timetable determined by the Head of Financial ServicesDirector of Resources and, in any
case, not later than 30th April.
3.5.12
With regard to contracts for construction and alterations to buildings and for civil
engineering works, to document and agree with the Head of Financial ServicesDirector of
Resources the systems and procedures to be adopted in relation to financial aspects. This
includes certification of interim and final payments, checking, recording and authorising
payments, the system for monitoring and controlling capital schemes and the procedures for
validation of subcontractors’ tax status.
3.5.13
To notify the Head of Financial ServicesDirector of Resources immediately of any
expenditure to be incurred as a result of statute/court order where there is no budgetary
provision.
3.5.14
To ensure that all appropriate payment records are retained and stored for the defined period,
in accordance with the document retention guidelines.
4.
PAYMENTS TO EMPLOYEES AND MEMBERS
4.1
4.1.1
Staff costs are the largest item of expenditure for most Council services. It is therefore
important that payments are accurate, timely, made only where they are due for services to
the Council and that payments accord with individuals’ conditions of employment. It is also
important that all payments are accurately and completely recorded and accounted for and
that Members’ allowances are authorised in accordance with the scheme adopted by the
Council.
4.2
Key controls
4.2.1
The key controls for payments to employees and Members are:
(a) proper authorisation procedures are in place and that there is adherence to corporate
timetables in relation to:
i.
ii.
starters
leavers
43
APPENDIX 5
Appendix D
iii.
iv.
v.
vi.
variations
enhancements
and that payments are made on the basis of timesheets or claims;
frequent reconciliation of payroll expenditure against approved budget and bank
account;
(b) all appropriate payroll documents are retained and stored for the defined period in
accordance with the document retention guidelines;
(c) that HM Revenues and Customs regulations are complied with.
4.3
4.3.1
To arrange and control secure and reliable payment of salaries, compensation or other
emoluments to existing and former employees, in accordance with procedures prescribed by
him/her, on the due date.
4.3.2
To ensure that all appropriate payroll documents are retained and stored for the defined
period in accordance with the document retention guidelines.
4.3.3
To record and make arrangements for the accurate and timely payment of tax, pensions and
other deductions.
4.3.4
To make arrangements for payment of all travel and subsistence claims.
4.3.5
To make arrangements for paying Members travel or other allowances upon receiving the
prescribed form, duly completed and authorised.
4.4
4.4.1
To notify the Head of Financial Services of all appointments, terminations or variations that
may affect the pay or pension of an employee or former employee, in the form and to the
timescale required by the Head of Financial Services.
4.4.23.6
To ensure that adequate and effective systems and procedures are operated, so that:
(a) payments are only authorised to bona fide employees;
(b) payments are only made where there is a valid entitlement;
(c) conditions and contracts of employment are correctly applied, employees’ names listed
on the payroll are checked at regular intervals to verify accuracy and completeness.
4.4.3
To ensure appointments are made in accordance with the regulations of the Council and
approved establishments, grades and scale of pay and that adequate budget provision is
available.
4.4.43.7 To ensure that the Head of Financial ServicesDirector of FinanceResources is notified of the
details of any employee benefits in kind, to enable full and complete reporting within the
income tax self-assessment system (P11d).
4.54
4.54.1
To send an up-to-date list of the names of officers authorised to sign records to the Head of
Financial ServicesDirector of Resources, together with specimen signatures.
44
APPENDIX 5
Appendix D
4.54.2
To ensure that payroll transactions are processed only through the payroll system. Heads of
ServiceDirectors should give careful consideration to the employment status of individuals
employed on a self-employed consultant or subcontract basis. HM Revenues and Customs
applies a tight definition for employee status, and in cases of doubt, advice should be sought
from the Head of Financial ServicesDirector of Resources.
4.54.3
To certify travel and subsistence claims and other allowances. Certification is taken to mean
that journeys were authorised and expenses properly and necessarily incurred, and that
allowances are properly payable by the Council, ensuring that cost-effective use of travel
arrangements is achieved. Due consideration should be given to tax implications and the
Head of Financial ServicesDirector of Resources is informed where appropriate.
4.54.4
To make, having regard to the particular circumstances of each case, ex gratia payments not
exceeding a specified financial limit (see Appendix F) in any one case, subject to
consultation with the Head of Financial ServicesDirector of Resources. The circumstances of
the proposed payment must not have the effect of circumventing other Council pay and
allowance policies, tax rules or other legislation.
4.54.5
To notify the Director of Resources of all appointments, terminations or variations that may
affect the pay or pension of an employee or former employee, in the form and to the
timescale required by the Director of Resources.
4.54.6
To ensure appointments are made in accordance with the regulations of the Council and
approved establishments, grades and scale of pay and that adequate budget provision is
available.
4.65
Responsibilities of Members and Officers
4.65.1
To submit claims for travel and subsistence allowances on a monthly basis and, in any event,
within one month of the year end.
5.
TAXATION
5.1
5.1.1
Like all organisations, the Council is responsible for ensuring its tax affairs are in order. Tax
issues are often very complex and the penalties for incorrectly accounting for tax are severe.
It is therefore very important for all officers to be aware of their role.
5.2
Key controls
5.2.1
The key controls for taxation are:
(a) Finance staff remain abreast with tax legislation, in particular that relating to PAYE,
NICs, CIS and VAT.
(b) budget managers are provided with relevant information and kept up to date on tax
issues;
(c) budget managers are instructed on required record keeping;
(d) all taxable transactions are identified, properly carried out, accounted for within
stipulated time-scales and paid through appropriate financial systems;
(e) records are maintained in accordance with instructions;
(f) returns are made to the appropriate authorities within the stipulated timescale.
45
APPENDIX 5
Appendix D
5.3
5.3.1
To complete all HM Revenues and Customs returns regarding PAYE and NIC’s.
5.3.2
To complete a monthly return of VAT inputs and outputs to HM Revenues and Customs.
5.3.3
To provide details to HM Revenues and Customs regarding the construction industry tax
deduction scheme in accordance with their deadlines.
5.3.4
To provide guidance for Council employees on taxation issues (including VAT).
5.4
5.4.1
To ensure that the correct VAT liability is attached to all income due and that all VAT
recoverable on purchases complies with HM Revenues and Customs regulations.
5.4.2
To ensure that, where construction and maintenance works are undertaken, the contractor
fulfils the necessary construction industry tax deduction requirements.
5.4.3
To follow any guidance on taxation issued by the Head of Financial ServicesDirector of
Resources.
6.
TRADING ACCOUNTS AND BUSINESS UNITS
6.1
6.1.1
Trading accounts have become more important as local authorities have developed a more
commercial culture.
6.2
General
6.2.1
Trading activities must operate within the Council’s overall arrangements and rules for
financial, personnel and resource management. Exceptionally, where it can be demonstrated
that this would lead to a unit being uncompetitive and losing work, special arrangements can
be considered. While the Standing Committees have an overall responsibility for the
operations of trading activities, clearly trading activities need freedom within this framework
to operate on a commercial basis. Trading activities must adhere to Financial Regulations,
unless alternative arrangements are explicitly identified and agreed in writing with the Head
6.3
6.3.1
To advise on the establishment and operation of trading accounts.
6.4
6.4.1
To ensure that the control of the trading activity will be to the financial target (the ‘bottom
line’) rather than to individual expenditure and income estimate headings
6.4.2
To ensure that as a minimum, a break even position should be achieved.
46
APPENDIX 5
Appendix D
6.4.3
To report to the Finance and Corporate Services Committee, where a trading activity plans a
significant item of expenditure (e.g. a capital scheme, the purchase of a major item of
computer software or the creation of a major ongoing revenue commitment), prior to the
expenditure being committed, unless already in an approved capital programme
6.4.4
To make a full report to the Finance and Corporate Services Committee, as soon as it is
known that the trading activity may make a deficit.
6.4.5
To make a report to the Finance & Corporate Services Committee on the outturn of each
trading activity compared to the financial plan.
6.4.6
To consult with the Head of Financial ServicesDirector of Resources and the Council’s legal
advisors where a trading activity wishes to enter into a contract with a third party where the
contract expiry date exceeds the remaining life of their main contract with the Council. In
general, such contracts should not be entered into unless they can be terminated within the
main contract period without penalty.
47
APPENDIX 5
Appendix E
1.
PARTNERSHIPS
1.1
1.1.1
Partnerships are likely to play a key role in delivering community strategies and in helping to
promote and improve the well-being of the area. Local authorities are working in partnership
with others – public agencies, private companies, community groups and voluntary
organisations. Local authorities still deliver some services, but their distinctive leadership
role is to bring together the contributions of the various stakeholders. They therefore need to
deliver a shared vision of services based on user wishes.
1.1.2
Local authorities will mobilise investment, bid for funds, champion the needs of their areas
and harness the energies of local people and community organisations. Local authorities
will be measured by what they achieve in partnership with others.
1.2
General
1.2.1
The main reasons for entering into a partnership are:
1.2.2
a)
the desire to find new ways to share risk;
b)
the ability to access new resources;
c)
to provide new and better ways of delivering services;
d)
to forge new relationships.
A partner is defined as either:
a)
b)
1.2.3
1.2.4
an organisation (private or public) undertaking, part funding or participating as a
beneficiary in a project or;
a body whose nature or status give it a right or obligation to support the project.
Partners participate in projects by:
a)
acting as a project deliverer or sponsor, solely or in concert with others;
b)
acting as a project funder or part funder;
c)
being the beneficiary group of the activity undertaken in a project.
Partners have common responsibilities:
a)
to be willing to take on a role in the broader programme appropriate to the skills and
resources of the partner organisation;
b)
to act in good faith at all times and in the best interests of the partnership’s aims and
objectives;
c)
be open about any conflict of interests that might arise;
d)
to encourage joint working and promote the sharing of information, resources and
skills between public, private and community sectors;
e)
to hold confidentially any information received as a result of partnership activities or
duties that is of a confidential or commercially sensitive nature;
f)
to act wherever possible as ambassadors for the project.
48
APPENDIX 5
Appendix E
1.3
Key controls
1.3.1
The key controls for Council partners are:
a)
if appropriate, to be aware of their responsibilities under the Council’s financial
regulations and procedures together with Contract Procedure Rules;
b)
to ensure that risk management processes are in place to identify and assess all known
risks;
c)
to ensure that project appraisal processes are in place to assess the viability of the
project in terms of resources, staffing and expertise;
d)
to agree and accept formally the roles and responsibilities of each of the partners
involved in the project before the project commences;
e)
to communicate regularly with other partners throughout the project so that problems
can be identified and shared to achieve their successful resolution.
1.4
1.4.1
To advise on effective controls that will ensure that resources are not wasted.
1.4.2
To advise on the key elements of funding a project. They include:
1.4.3
a)
a scheme appraisal for financial viability in both the current and future years;
b)
risk appraisal and management;
c)
resourcing, including taxation issues;
d)
audit, security and control requirements;
e)
carry-forward arrangements.
To ensure that the accounting arrangements are satisfactory.
1.6.11.4.4
To maintain a register of all contracts entered into with external bodies.
1.5
1.5.1
To ensure that, before entering into agreements with external bodies the Council’s legal
advisors are consulted.
1.5.2
To ensure that, before entering into agreements with external bodies, a risk management
appraisal has been prepared for the Head of Organisational Development.
1.5.3
To ensure that such agreements and arrangements do not impact adversely upon the services
provided by the Council.
1.5.4
To ensure that all agreements and arrangements are properly documented.
1.5.5
To provide appropriate information to the Head of Financial ServicesDirector of Resources
to enable a note to be entered into the Council’s Statement of Accounts concerning material
items.
49
APPENDIX 5
Appendix E
1.6
Responsibilities of the Head of Financial Services
1.6.1
2.
To maintain a register of all contracts entered into with external bodies.
EXTERNAL FUNDING
2.1
2.1.1
External funding is potentially a very important source of income, but funding conditions
need to be carefully considered to ensure that they are compatible with the aims and
objectives of the Council. Local authorities are increasingly encouraged to provide seamless
service delivery through working closely with other agencies and private service providers.
Funds from external agencies provide additional resources to enable the Council to deliver
services to the local community. However, in some instances, although the scope for
external funding has increased, such funding is linked to tight specifications and may not be
flexible enough to link to the Council’s overall plan.
2.2
Key controls
2.2.1
The key controls for external funding are:
a)
to ensure that key conditions of funding and any statutory requirements are complied
with and that the responsibilities of the accountable body are clearly understood;
b)
to ensure that funds are acquired only to meet the priorities approved in the policy
framework by the Council;
c)
to ensure that any match-funding requirements and future revenue implications are
given due consideration prior to entering into long-term agreements and that future
revenue budgets reflect these requirements.
2.3
2.3.1
To ensure that all funding notified by external bodies is received and properly recorded in
the Council’s accounts.
2.3.2
To ensure that the match-funding requirements are considered prior to entering into the
agreements and that future revenue budgets reflect these requirements.
2.3.3
To ensure that audit requirements are met.
2.4
2.4.1
To ensure that all claims for funds are made by the due date.
2.4.2
To ensure that the project progresses in accordance with the agreed project and that all
expenditure is properly incurred and recorded.
3.
WORK FOR THIRD PARTIES
3.1
3.1.1
Legislation enables the Council to provide a range of services to other bodies. Such work
may enable a unit to maintain economies of scale and existing expertise. Arrangements
should be in place to ensure that any risks associated with this work is minimised and that
such work is intra vires.
50
APPENDIX 5
Appendix E
3.2
Key controls
3.2.1
The key controls for working with third parties are:
a)
to ensure that proposals are costed properly in accordance with guidance provided by
the Head of Financial ServicesDirector of Resources;
b)
to ensure that contracts are drawn up using guidance provided by the Head of
Financial ServicesDirector of Resources and that the formal approvals process is
adhered to;
c)
to issue guidance with regard to the financial aspects of third party contracts and the
maintenance of the contract register.
3.3
Responsibilities of Head of Financial ServicesDirector of Resources
3.3.1
To issue guidance with regard to the financial aspects of third party contracts and the
maintenance of the contract register.
3.4
3.4.1
To ensure that the approval of the appropriate Standing Committee is obtained before any
negotiations are concluded to work for third parties.
3.4.2
To maintain a register of all contracts entered into with third parties in accordance with
procedures specified by the Head of Financial ServicesDirector of Resources.
3.4.3
To ensure that appropriate insurance arrangements are made.
3.4.4
To ensure that the Council is not put at risk from any bad debts.
3.4.5
To ensure that no contract is subsidised by the Council.
3.4.6
To ensure that, wherever possible, payment is received in advance of the delivery of the
service.
3.4.7
To ensure that the service has the appropriate expertise to undertake the contract.
3.4.8
To ensure that such contracts do not impact adversely upon the services provided for the
Council.
3.4.9
To ensure that all contracts are properly documented.
3.4.10
To provide appropriate information to the Head of Financial ServicesDirector of Resources
to enable a note to be entered into the Statement of Accounts.
51
APPENDIX 5
Financial Limits
Appendix F
1.
General
1.1
Throughout these regulations, there are references to financial limits. These limits will need
to be reviewed on a regular basis and, consequently, the latest figures have been
consolidated in this appendix in order to facilitate any future changes. The regulations which
contain financial limits are listed below:
1.2
Virements between budget heads require the approval of the Finance & Corporate Services
Committee subject to the authorisation limits set out below.
1.3
The financial limits for approval of revenue virements and revenue supplementary estimates
are set out below:
(a)
Virements within same budget head
Relevant Head of ServiceDirector and Head of Financial ServicesDirector of
Resources
(b)
Virements between different budget heads
(i)
Up to £20,000 – Head of ServiceDirector and Head of Financial
ServicesDirector of Resources and reported in the monthly Members bulletin.
(ii)
Over £20,000 up to £50,000 - Head of ServiceDirector, Head of Financial
ServicesDirector of Resources in consultation with relevant Standing
Committee Chairman; and reported to the next Finance & Corporate Services
Committee meeting;
(iii) Over £50,000 - the Finance & Corporate Services Committee.
(c)
Supplementary Estimates
(i)
Up to £20,000 – Head of ServiceDirector, Director of Resources and Chief
Executive in consultation with the Chairman of the Finance & Corporate
Services Committee and the Leader and reported to the next Finance &
Corporate Services Committee;
(ii)
Over £20,000 – the Finance & Corporate Services Committee.
NB One of the Council’s budget policies is to only agree supplementary estimates
in exceptional circumstances.
1.4
A capital scheme (an identifiable project) is where expenditure exceeds £10,000.
1.5
The financial limits for approval of capital virements and capital supplementary estimates
are the same as for revenue.
1.6
Any excess expenditure over the approved contract sum of more than both 5% or £10,000
whichever is the greater must be reported to the Standing Committee (Appendix B paragraph
2.21.8).
1.7
The asset register shall contain all assets with a value in excess of £10,000 (Appendix C
paragraph 5.3.1).
1.8
All items with a value in excess of £1,000 shall be included in inventories (Appendix C
paragraph 5.14.15).
52
APPENDIX 5
Financial Limits
Appendix F
1.9
Finance & Corporate Services Committee approval is required to declare land surplus to
requirements where the value exceeds £10,000 (Appendix C paragraph 5.4.4).
1.10
Finance and Corporate Services Committee approval is required to write-off bad debts in
excess of £10,000 (Appendix D paragraph 2.3.3), in the case of Non Domestic Rates Debts
this is increased to £20,000.
1.11
Finance & Corporate Services Committee approval is required to make ex-gratia payments
in excess of £2,000 (Appendix D paragraph 4.5.4).
1.12
Finance limits relating to contracts are contained in the Council’s Contract Procedure
Rules.
53
APPENDIX 5
Bank Mandate
Appendix G
1.
Subject to an adequate indemnity and satisfactory security arrangements being maintained,
pre-signed cheques may be used for payments not exceeding £10,000. The facsimile
signature of the Chief Executive shall appear on all pre-signed cheques.
2.
Cheques above £10,000 shall be countersigned by the Head of Financial ServicesDirector of
Resources or, in his/her absence, the Chief Executive or the Director of Customers and
Community or the Director of Planning and Regulatory Services. or the Head of
Organisational Development.
3.
Amendments to cheques can be countersigned by the above and additionally the Principal
Finance Manager or Senior Accountants for cheques up to £10,000.
4.
Manual CHAPS payments shall be signed by any two of the following:
a)
Head of Financial ServicesDirector of Resources
b)
Chief Executive
c)
Director of Customers and Community
b)d) Director of Planning and Regulatory Services
c)
Head of Organisational Development
5.
All arrangements with the Council's bankers shall be made by the Head of Financial
ServicesDirector of Resources who shall be authorised to operate such banking accounts as
he/she may consider necessary.
6.
All cheques shall be ordered only on the authority of the Head of Financial ServicesDirector
of Resources or under arrangements made by him/her.
7.
All cheques shall be kept in safe custody by the Head of Financial ServicesDirector of
Resources until issue.
8.
All instructions relating to the Council's banking accounts, shall be authorised by the Head
of Financial ServicesDirector of Resources or Officers authorised by him or her.
9.
Payments may be made by BACS or CHAPS electronic transmission subject to two
authorised card holder authentications and authorisation in accordance with the following
limits:
Up to £50,000 - Officers delegated by Heads of ServiceDirectors under the scheme of
delegation
Above £50,000 - Head of Service, Strategic DirectorDirectors or Chief Executive
54
APPENDIX 5
Authorisation Arrangements
Appendix H
Total Value
Up to £5,000
Category
Electronic Orders
Authorisation Level
Authorised buyer
£5,001 to £2050,000
Invoice Authorisations, Electronic Order
Approvals, Mileage and Expenses Claims
Invoice Authorisations and Electronic
Order Approvals
Line Manager
Above £2050,001*
Head of Service or
Strategic DirectorDirector
or Chief Executive
* Note requirement for written contracts above £50,000 – See Section 16.2 of Contract
Procedure Rules.
Definitions (as per Contract Procedure Rules)
Approved Buyer- An Officer designated by a Head of ServiceDirector who is authorised to generate
electronic orders on behalf of the Council.
Line Manager - An Officer designated by the Head of ServiceDirector to exercise the role reserved to
the line manager by the contract procedure rules, this will be a Manager or Team
LeaderLevel 2 Manager.
Head of ServiceDirectorOne of seven three Heads of ServiceDirectors responsible for operational
delivery of services and designated as such in the constitution.
Strategic Director -
The officer(s) defined as such in the Constitution.
55
APPENDIX 6
MALDON DISTRICT
COUNCIL
Contract Procedure Rules
Approved by Council Feb 2014March 2015
1 / 28
APPENDIX 6
CONTENTS
A BRIEF GUIDE TO CONTRACT PROCEDURE RULES .............................. 4
SECTION 1: SCOPE OF CONTRACT PROCEDURE RULES ...................... 5
1.
BASIC PRINCIPLES ..................................................................................... 5
2.
OFFICER RESPONSIBILITIES .................................................................... 5
3.
EXEMPTIONS, COLLABORATIVE AND E-PROCUREMENT
ARRANGEMENTS ........................................................................................ 6
4.
RELEVANT CONTRACTS ............................................................................ 7
SECTION 2: COMMON REQUIREMENTS ..................................................... 7
5.
STEPS PRIOR TO PURCHASE ................................................................... 7
6.
RECORDS (acquisitions and disposals) ....................................................... 8
7.
ADVERTISING, APPROVED LISTS AND FRAMEWORK AGREEMENTS . 8
SECTION 3: CONDUCTING PURCHASE AND DISPOSAL ........................ 11
8.
COMPETITION REQUIREMENTS FOR PURCHASE, DISPOSAL AND
PARTNERSHIP ARRANGEMENTS ........................................................... 11
9.
PRE-TENDER MARKET RESEARCH AND CONSULTATION .................. 13
10.
STANDARDS AND AWARD CRITERIA ..................................................... 13
11.
INVITATIONS TO TENDER / QUOTATIONS ............................................. 14
12.
SHORTLISTING .......................................................................................... 15
13.
SUBMISSION, RECEIPT AND OPENING OF TENDERS/QUOTATIONS.15
14.
CLARIFICATION PROCEDURES AND POST-TENDER NEGOTIATION . 16
15.
EVALUATION, AWARD OF CONTRACT, & DEBRIEFING CANDIDATES 16
SECTION 4: CONTRACT AND OTHER FORMALITIES .............................. 18
16.
CONTRACT DOCUMENTS ........................................................................ 18
17.
BONDS AND PARENT COMPANY GUARANTEES .................................. 20
18.
PREVENTION OF CORRUPTION .............................................................. 20
2 / 28
APPENDIX 6
19.
DECLARATION OF INTERESTS ............................................................... 20
SECTION 5: CONTRACT MANAGEMENT ................................................... 21
20.
MANAGING CONTRACTS ......................................................................... 21
21.
RISK ASSESSMENT AND CONTINGENCY PLANNING ........................... 21
22.
CONTRACT MONITORING, EVALUATION AND REVIEW ....................... 21
DEFINITIONS APPENDIX ............................................................................. 23
All costs stated in these contract procedure rules are exclusive of VAT, Staff costs
and fees. Terms appearing in the definitions appendix are italicised.
3 / 28
APPENDIX 6
A BRIEF GUIDE TO CONTRACT PROCEDURE RULES
These contract procedure rules (issued in accordance with section 135 of the 1972 Local
Government Act) are intended to promote good purchasing practice and public
accountability and deter corruption. Following the rules is the best defence against
allegations that a purchase has been made incorrectly or fraudulently.
Officers responsible for purchasing or disposal must comply with these contract procedure
rules. They lay down minimum requirements and a more thorough procedure may be
appropriate for a particular contract. (For example, if Rule 8.1 would normally require that
quotes be obtained, it might be appropriate in particular circumstances to seek additional
quotations in writing or tender submissions. Equally, it may not always be appropriate to
make use of an exemption under Rule 3 even if one might apply or be granted.)
For the purposes of these rules, where there is a requirement for communication to be in
writing, this shall be deemed to include e-mail and fax transmissions as well as hard copy.
•
•
•
•
•
•
•
•
•
•
•
Follow the rules if you purchase goods or services or order building work.
Take all necessary legal, financial and professional advice.
Declare any personal financial interest in a contract. Corruption is a criminal offence.
Conduct any Best Value review and appraise the purchasing need.
Check whether there is an existing Corporate Contract you can make use of before
undergoing a competitive process.
Normally allow at least four weeks for submission of bids (not to be submitted by fax
or e-mail).
Keep bids confidential.
Complete a written contract or council order before the supply or works begin.
Identify a contract manager with responsibility for ensuring the contract delivers as
intended.
Keep records of dealings with suppliers.
Assess each contract afterwards to see how well it met the purchasing need and
Value for Money requirements.
In accordance with the Constitution, the Head of Financial ServicesDirector of Resources
shall have the power to make amendments from time to time to these contract procedure
rules after consultation with the Solicitor.
4 / 28
APPENDIX 6
SECTION 1: SCOPE OF CONTRACT PROCEDURE RULES
1.
BASIC PRINCIPLES
All purchasing and disposal procedures must:
•
•
•
•
•
•
•
Achieve Best Value for public money spent
Be consistent with the highest standards of integrity
Ensure fairness in allocating public contracts
Comply with all legal requirements
Ensure that Non-commercial Considerations do not influence any Contracting
Decision
Support the council’s corporate and departmental aims and policies
Comply with the council’s corporate Procurement Strategy and competition
policy.
2.
OFFICER RESPONSIBILITIES
2.1
Officers
2.1.1
Officers responsible for purchasing or disposal must comply with these contract
procedure rules, Financial Regulations, the Code of Conduct and with all UK and
European Union binding legal requirements. Officers must ensure that any Agents,
Consultants and contractual partners acting on their behalf also comply.
2.1.2
Officers must:
•
Have regard to the guidance in the Purchasing Guidance
•
Check whether a suitable Corporate Contract exists before seeking to let
another contract; where a suitable Corporate Contract exists, this must be
used unless there is an auditable reason not to keep the records required by
Rule 6
•
Take all necessary legal, financial and professional advice.
2.1.3
When any employee either of the authority or of a service provider may be affected
by any transfer arrangement, Officers must ensure that the Transfer of Undertaking
(Protection of Employment) (TUPE) issues are considered and obtain legal advice
before proceeding with inviting Tenders or Quotations.
2.2
Heads of ServiceDirectors
2.2.1
Heads of ServiceDirectors must:
•
Ensure that their staff comply with Rule 2.1 Keep registers of: Contracts
Completed by signature, rather than by the council’s seal (see Rule 16.3)
•
Arrange their safekeeping on council premises exemptions recorded under
Rule 3.2.
5 / 28
APPENDIX 6
3.
EXEMPTIONS, COLLABORATIVE AND E-PROCUREMENT
ARRANGEMENTS
3.1
The council has the power to waive any requirements within these contract
procedure rules for specific projects.
3.2
Where a proposed contract is likely to exceed the European Union (EU) Threshold,
Heads of ServiceDirectors have no delegated powers and the matter has to be
determined by the council (see Rule 3.1). No exemption can be used if the EU
Procedure applies or if the Total Value exceeds £24,999.
3.3
Where an exemption is necessary because of an unforeseeable emergency involving
immediate risk to persons, property or serious disruption to council services, the
Officer and the Head of Financial ServicesDirector of Resources may jointly approve
the exemption but they must prepare a report for the next Finance and Corporate
Services Committee to support the action taken.
3.4
All exemptions, and the reasons for them, must be recorded using the form in the
Purchasing Guidance. Exemptions shall be signed by the Officer and countersigned
by the Head of Financial ServicesDirector of Resources and where appropriate the
Chairman of the Finance & Corporate Services Committee.
3.5
The Head of Financial ServicesDirector of Resources must be consulted prior to
commencing any procurement process using Office of Government Commerce
(OGC) Buying Solutions Contracts. The terms and conditions of contract applicable
to any OGC arrangement, including the requirement to undertake competition
between providers, must be fully complied with.
3.6
Financial Officers must monitor the use of all exemptions.
3.7
In order to secure Value for Money, the authority may enter into collaborative
procurement arrangements. The Officer must consult the Head of Financial
ServicesDirector of Resources and the Solicitor where the purchase is to be made
using collaborative procurement arrangements with another local authority,
government department, statutory undertaker or public service purchasing
consortium.
3.7.1
All purchases made via a local authority purchasing consortium are deemed to
comply with these contract procedure rules and no exemption is required. However,
purchases above the EU Threshold must be let under the EU Procedure, unless the
consortium has satisfied this requirement already by letting their contract in
accordance with the EU Procedures on behalf of the authority and other consortium
members.
3.7.2
Any contracts entered into through collaboration with other local authorities or other
public bodies, where a competitive process has been followed that complies with the
contract procedure rules of the leading organisation, will be deemed to comply with
these contract procedure rules and no exemption is required. However, advice must
be sought from Financial Servicesthe Resources Directorate.
3.8
The use of e-procurement technology does not negate the requirement to comply
with all elements of these contract procurement rules, particularly those relating to
competition and Value for Money.
6 / 28
APPENDIX 6
4.
RELEVANT CONTRACTS
4.1
All Relevant Contracts must comply with these contract procedure rules. A Relevant
Contract is any arrangement made by, or on behalf of, the authority for the carrying
out of works or for the supply of goods, materials or services. These include
arrangements for:
•
The supply or disposal of goods;
•
The hire, rental or lease of goods or equipment;
•
The delivery of services, including (but not limited to) those related to:
•
The recruitment of staff
•
Land and property transactions
•
Financial and Consultancy Services
4.2
Relevant Contracts do not include:
•
Contracts of employment which make an individual a direct employee of the
authority, or
•
Agreements regarding the acquisition, disposal, or transfer of land (for which
Financial Regulations shall apply).
SECTION 2: COMMON REQUIREMENTS
5.
STEPS PRIOR TO PURCHASE
5.1
The Officer must appraise the purchase, in a manner commensurate with its
complexity and value and taking into account any guidance in the Purchasing
Guidance, by:
•
Taking into account the requirements from any relevant Best Value review
appraising the need for the expenditure and its priority defining the objectives
of the purchase.
•
Assessing the risks associated with the purchase and how to manage them
considering what procurement method is most likely to achieve the
purchasing objectives, including internal or external sourcing, partnering,
packaging strategy and collaborative procurement arrangements with another
local authority, government department, statutory undertaker or public service
purchasing consortium.
•
Consulting users as appropriate about the proposed procurement method,
contract standards and performance and user satisfaction monitoring.
•
Drafting the terms and conditions that are to apply to the proposed contract
setting out these matters in writing if the Total Value of the purchase exceeds
£50,000
5.2
And by confirming that:
•
There is Council or delegated approval for the expenditure and the purchase
accords with the approved policy framework and scheme of delegation as set
out in the Constitution
7 / 28
APPENDIX 6
6.
RECORDS (ACQUISITIONS AND DISPOSALS)
6.1
Where the Total Value is less than £50,000, the following records must be kept:
•
Invitations to quote and Quotations;
•
A record:
•
of any exemptions and the reasons for them;
•
of the reason if the lowest price is not accepted.
•
Written records of communications with the successful contractor or an
electronic record if a written record of the transaction would normally not be
produced.
6.2
Where the Total Value exceeds £50,000 the Officer must record:
•
The method for obtaining bids (see Rule 8.1);
•
Any Contracting Decision and the reasons for it;
•
Any exemption under Rule 3 together with the reasons for it;
•
The Award Criteria in descending order of importance;
•
Tender documents sent to and received from Candidates;
•
Pre-tender market research;
•
Clarification and post-tender negotiation (to include minutes of meetings);
•
The contract documents;
•
Post-contract evaluation and monitoring;
•
Communications with Candidates and with the successful contractor
throughout the period of the contract.
6.3
Records required by this rule must be kept for six years after the end of the contract.
However, written documents which relate to unsuccessful Candidates may be
electronically scanned or stored by some other suitable method after 12 months from
award of contract, provided there is no dispute about the award.
7.
ADVERTISING, APPROVED LISTS AND FRAMEWORK AGREEMENTS
7.1
Identifying and Assessing Potential Candidates
7.1.1
Officers shall ensure that, where proposed contracts, irrespective of their Total Value,
might be of interest to potential Candidates located in other member states of the EU,
a sufficiently accessible advertisement is published.
7.1.2
Generally, the greater the interest of the contract to potential bidders from other
member estates, the wider the coverage of the advertisement should be. Examples
of where such advertisements may be placed include:
•
The council’s website
•
Portal websites specifically created for contract advertisements (all contracts with
a Total Value exceeding £24,999 must be advertised on the Contracts Finder
website)
•
National official journals,
or
8 / 28
APPENDIX 6
•
The Official Journal of the European Union (OJEU) / Tenders Electronic Daily
(TED) (even if there is no requirement within the EU Procedure).
7.1.3
Officers are responsible for ensuring that all Candidates for a Relevant Contract are
suitably assessed. The assessment process shall establish that the potential
Candidates have sound:
•
Economic and financial standing;
•
Technical ability and capacity to fulfil the requirements of the authority.
7.1.4
This shall be achieved in respect of proposed contracts that are expected to exceed
£50,000 by selecting firms from:
•
Approved Lists of providers, maintained by the authority or on its behalf, and
compiled following responses to a public advertisement, or
•
Shortlists assessed from expressions of interest in a particular contract
submitted in response to a public advertisement.
7.1.5
Public advertisements issued in respect of Rule 7.1.4 above shall reflect the potential
degree of interest from Candidates located within other member states of the EU.
7.2
Approved Lists (for contracts with a Total value not exceeding £24,999)
7.2.1
Approved Lists should be used where recurrent transactions of a similar type are
likely but where such transactions need to be priced individually and cannot easily be
aggregated and priced in a single tendering exercise. Approved Lists cannot be used
where the EU Procedure applies.
7.2.2
Heads of ServiceDirectors may draw up in consultation with Financial Servicesthe
Resources Directorate:
•
Approved Lists of persons ready to perform contracts to supply goods or
services of particular types including without limitation on the basis of agreed
contract terms criteria for Short-listing from the lists.
7.2.3
No person may be entered on an Approved List until there has been an adequate
investigation into both their financial and their technical ability to perform the contract,
unless such matters will be investigated each time bids are invited from that list.
7.2.4
Approved Lists must be drawn up after an advertisement inviting applications for
inclusion on the list. The advertisement must be placed to secure the widest publicity
among relevant suppliers throughout all member states of the EU. Persons may be
entered on a list between the initial advertisement and re-advertisement provided the
requirements of Rule 7.2.3 are met.
7.2.5
The list and Short-listing criteria must be reviewed at least annually and re-advertised
at least every three years. On re-advertisement, a copy of the advertisement must
be sent to each person on the list, inviting them to reapply. Review means:
•
The re-assessment of the financial and technical ability and performance of
those persons on the list, unless such matters will be investigated each time
bids are invited from that list;
•
The deletion of those persons no longer qualified, with a written record kept
justifying the deletion.
7.2.6
All Approved Lists shall be maintained in an open, fair and transparent manner and
be open to public inspection.
9 / 28
APPENDIX 6
7.2.7
A register of pre-qualified contractors and Consultants maintained by or on behalf of
central government (e.g. Construction line) will be deemed to be an Approved List for
the purpose of these contract procedure rules and shall not be subject to the
requirements of Rules 7.2.2 to 7.2.6 inclusive.
7.3
Framework Agreements
7.3.1
The term of a Framework Agreement must not exceed four years and, while an
agreement may be entered into with one provider, where an agreement is concluded
with several organisations, there must be at least three in number.
7.3.2
Contracts based on Framework Agreements may be awarded by either:
•
applying the terms laid down in the Framework Agreement (where such terms
are sufficiently precise to cover the particular call-off) without reopening
competition, or
•
where the terms laid down in the Framework Agreement are not precise
enough or complete for the particular call-off, by holding a mini competition in
accordance with the following procedure:
•
inviting the organisations within the Framework Agreement that are capable
of executing the subject of the contract to submit written Tenders;
•
fixing a time limit which is sufficiently long to allow Tenders for each
specific contract to be submitted, taking into account factors such as
the complexity of the subject of the contract;
•
awarding each contract to the tenderer who has submitted the best
Tender on the basis of the Award Criteria set out in the specifications
of the Framework Agreement.
10 / 28
APPENDIX 6
SECTION 3: CONDUCTING PURCHASE AND DISPOSAL
8.
COMPETITION REQUIREMENTS FOR PURCHASE, DISPOSAL AND
PARTNERSHIP ARRANGEMENTS
The Officer must calculate the Total Value.
The following procedures apply where there are no other procedures which take
precedence. Other procedures may include agency agreements with government. If in
doubt, Officers must seek the advice of the Head of Financial ServicesDirector of
Resources.
8.1
Purchasing – Competition Requirements
8.1.1
Where the Total Value for a purchase is within the values in the first column below,
the Award Procedure in the second column must be followed. Short-listing shall be
done by the persons specified in the third column.
Total Value Award
Total Value
Award Procedure
Short listing
Up to £5,000
At least one and preferably up to
three Quotations. (confirmed in
writing where the Total Value
exceeds £500)
Officer
£5,001
£50,00024,999
to The Receipt of three written
Quotations (this requirement may be
waived with the written consent of
the Head of Financial
ServicesDirector of Resources in
consultation with the Chairman of
the Finance & Corporate Services
Committee).
Officer and Line
Manager
£25,000 to £50,000
Quotations sought by advertisement
on Contracts Finder
Officer and Line
Manager
£50,001 to EU
Threshold
Invitation to Tender to at least three
and no more than five Candidatesby
advertisement on Contracts Finder
Officer, Line Manager
and Director
Above EU
Threshold
EU Procedure or, where this does
not apply, Invitation to Tender by
advertisement on Contracts
Finder/list to at least four and no
more than six Candidates
Consult the Essex
Procurement Hub –
see Rule 8.1.4
8.1.2
Where it can be demonstrated that there are insufficient suitably qualified Candidates
to meet the competition requirement, all suitably qualified Candidates must be
invited.
8.1.3
An Officer must not enter into separate contracts nor select a method of calculating
the Total Value in order to minimise the application of these contract procedure rules.
11 / 28
APPENDIX 6
8.1.4
Where the EU Procedure is required, the Officer shall consult the Essex Procurement
Hub to determine the method of conducting the purchase.
8.2
Assets for Disposal
8.2.1
Assets for disposal must be sent to public auction (including electronic auction sites
such as eBay) except where better Value for Money is likely to be obtained by
inviting Quotations and Tenders. (These may be invited by advertising on the
council’s internet site.) In the latter event, the method of disposal of surplus or
obsolete stocks/stores or assets other than land must be formally agreed with the
Head of Financial ServicesDirector of Resources.
8.2.2
In the first instance surplus vehicles, plant and equipment should be offered to Parish
Council’s within the District at a fair price (sold as seen) agreed by the Head of
Financial ServicesDirector of Resources in consultation with the relevant Head of
ServiceDirector.
8.3
Providing Services to External Purchasers
8.3.1
The Head of Financial ServicesDirector of Resources and Financial Regulations and
procedures must be consulted where contracts to work for organisations other than
the authority are contemplated.
8.4
Collaborative and Partnership Arrangements
8.4.1
Collaborative and partnership arrangements are subject to all UK and EU
procurement legislation and must follow these contract procedure rules.
8.4.2
If in doubt, Officers must seek advice of the Essex Procurement Hub.
8.5
The Appointment of Consultants to Provide Services
8.5.1
Consultant architects, engineers, surveyors and other professional Consultants shall
be selected and commissions awarded in accordance with the procedures detailed
within these contract procedure rules and as outlined below.
Total Value
Award Procedure
Short listing
Up to £5,000
At least one and preferably up to
three Quotations. (confirmed in
writing where the Total Value
exceeds £500)
Officer
£5,001 to
£50,00024,999
The receipt of three written
Quotations (This requirement may
be waived with the written consent
of the Head of Financial
ServicesDirector of Resources in
consultation with the Chairman of
the Finance and Corporate Services
Committee).
Officer and Line
Manager
£25,000 to £50,000
Quotations sought by advertisement
on Contracts Finder
Officer and Line
Manager
12 / 28
APPENDIX 6
£50,001 to EU
Threshold
Invitation to Tender to at least three
and no more than five Candidatesby
advertisement on Contracts Finder
Officer, Line Manager
and Director
Above EU
Threshold
EU Procedure or, where this does
not apply, Invitation to Tender by
advertisement / list to at least four
and no more than six Candidateson
Contracts Finder
Consult the Essex
Procurement Hub –
see Rule 8.1.4
8.5.2
The engagement of a Consultant shall follow the agreement of a brief that adequately
describes the scope of the services to be provided and shall be subject to completion
of a formal letter or contract of appointment.
8.5.3
Records of consultancy appointments shall be maintained in accordance with Rule 6.
8.5.4
Consultants shall be required to provide evidence of, and maintain professional
indemnity insurance policies to the satisfaction of the relevant Head of
ServiceDirector for the periods specified in the respective agreement.
9.
PRE-TENDER MARKET RESEARCH AND CONSULTATION
9.1
The Officer responsible for the purchase:
•
•
May consult potential suppliers prior to the issue of the Invitation to Tender in
general terms about the nature, level and standard of the supply, contract
packaging and other relevant matters, provided this does not prejudice any
potential Candidate
Must not seek or accept technical advice on the preparation of an Invitation to
Tender or Quotation from anyone who may have a commercial interest in
them, if this may prejudice the equal treatment of all potential Candidates or
distort competition, and should seek advice from the Essex Procurement Hub.
10.
STANDARDS AND AWARD CRITERIA
10.1
The Officer must ascertain what are the relevant British, European or international
standards which apply to the subject matter of the contract. The Officer must include
those standards which are necessary properly to describe the required quality. The
Head of ServiceDirector must be consulted if it is proposed to use standards other
than European standards.
10.2
The Officer must define Award Criteria that are appropriate to the purchase and
designed to secure an outcome giving Value for Money for the authority. The basic
criteria shall be:
•
‘Lowest price’ where payment is to be made by the authority;
•
‘Highest price’ if payment is to be received; or
•
‘Most economically advantageous’, where considerations other than price
also apply.
13 / 28
APPENDIX 6
If the last criterion is adopted, it must be further defined by reference to sub-criteria
which may refer only to relevant considerations.
These may include price, service, quality of goods, running costs, technical merit,
previous experience, delivery date, cost effectiveness, quality, relevant
environmental considerations, aesthetic and functional characteristics (including
security and control features), safety, after-sales services, technical assistance and
any other relevant matters.
10.3
Award Criteria must not include:
•
Non-commercial Considerations
•
Matters which discriminate against suppliers from the European Economic
Area or signatories to the Government Procurement Agreement.
11.
INVITATIONS TO TENDER / QUOTATIONS
11.1
The Invitation to Tender shall state that no Tender will be considered unless it is
received by the date and time stipulated in the Invitation to Tender. No Tender
delivered in contravention of this clause shall be considered.
11.2
All Invitations to Tender shall include the following:
(a)
A specification that describes the authority’s requirements in sufficient detail
to enable the submission of competitive offers.
(b)
A requirement for tenderers to declare that the Tender content, price or any
other figure or particulars concerning the Tender have not been disclosed by
the tenderer to any other party (except where such a disclosure is made in
confidence for a necessary purpose).
(c)
A requirement for tenderers to complete fully and sign all Tender documents
including a form of Tender and certificates relating to canvassing and noncollusion.
(d)
Notification that Tenders are submitted to the council on the basis that they
are compiled at the tenderer’s expense.
(e)
A description of the Award Procedure and, unless defined in a prior
advertisement, a definition of the Award Criteria in objective terms and if
possible in descending order of importance.
(f)
Notification that no Tender will be considered unless it is enclosed in a sealed
envelope or container which bears the word ‘Tender’ followed by the subject
to which it relates, but no other name or mark indicating the sender. Proforma
Tender labels are available from the Committee Services Office. (Refer to
TENDERS AND QUOTATIONS – procedure note).
(g)
A stipulation that any Tenders submitted by fax or other electronic means
shall not be considered with the exception of the Council’s electronic tender
portal.
14 / 28
APPENDIX 6
(h)
The method by which any arithmetical errors discovered in the submitted
Tenders is to be dealt with. In particular, whether the overall price prevails
over the rates in the Tender or vice versa.
11.3
All Invitations to Tender or Quotations must specify the goods, service or works that
are required, together with the terms and conditions of contract that will apply (see
Rule 16).
11.4
The Invitation to Tender or Quotation must state that the council is not bound to
accept any Quotation or Tender.
11.5
All Candidates invited to Tender or quote must be issued with the same information
at the same time and subject to the same conditions. Any supplementary information
must be given on the same basis. For contracts with a Total Value exceeding
£24,999, documentation will need to be uploaded to Contracts Finder at the time of
publishing the notice.
12.
SHORTLISTING
12.1
Any Shortlisting must have regard to the financial and technical standards relevant to
the contract and the Award Criteria. Special rules apply in respect of the EU
Procedure.
12.2
The officers responsible for Shortlisting are specified in Rule 8.1.1.
12.3
Where Approved Lists are used, Shortlisting may be done by the Officer in
accordance with the Shortlisting criteria drawn up when the Approved List was
compiled (see Rule 7.2.2). However, where the EU Procedure applies, Approved
Lists may not be used.
13.
SUBMISSION, RECEIPT AND OPENING OF TENDERS/QUOTATIONS
13.1
Candidates must be given an adequate period in which to prepare and submit a
proper Quotation or Tender, consistent with the complexity of the contract
requirement. For contracts with a Total Value exceeding £24,999, the minimum term
for receipt of tenders or quotations from the date advertised is 35 calendar
days.Normally at least four weeks should be allowed for submission of Tenders. The
EU Procedure lays down specific time periods (see guidance in the Purchasing
Guidance).
13.2
All Tenders must be returned to the Head of Customer and Democratic
13.3
Tenders received by fax or other electronic means (e.g. email) must be rejected,
unless they have been sought in accordance with an electronic tendering system
approved by the Head of Financial ServicesDirector of Resources.
13.4
The Officer must not disclose the names of Candidates to any staff involved in the
receipt, custody or opening of Tenders.
13.5
The Head of Customer and Democratic ServicesDirector of Resources shall be
responsible for the safekeeping of Tenders until the appointed time of opening. Each
Tender must be: Suitably recorded so as to subsequently verify the date and precise
time it was received adequately protected immediately on receipt to guard against
amendment of its contents recorded immediately on receipt in the Tender Record
Log.
15 / 28
APPENDIX 6
13.6
The Head of Customer and Democratic ServicesDirector of Resources must ensure
that all Tenders are opened at the same time when the period for their submission
has ended. Members will be made aware of the opening arrangements should they
wish to observe the process. The Officer or his or her representative must be
present. Tenders must be opened in the presence of two officers representing the
Head of Customer and Democratic Services and Head of Organisational
DevelopmentDirector of Resources, neither of whom can be the Officer. Where the
Total Value is more than the EU Threshold, one must be the Head of Financial
ServicesDirector of Resources or Officer designated by the Head of Financial
13.7
Upon opening, a summary of the main terms of each Tender (i.e. significant issues
that are unique to each Tender submission and were not stated in the Tender
invitation documents such as Tender sum, construction period, etc.) must be
recorded in the Tender Record Log. The summary must be initialled on behalf of the
Head of Customer and Democratic ServicesDirector of Resources.
14.
CLARIFICATION PROCEDURES AND POST-TENDER NEGOTIATION
14.1
Providing clarification of an Invitation to Tender to potential or actual Candidates or
seeking clarification of a Tender, whether in writing or by way of a meeting, is
permitted. However, discussions with tenderers after submission of a Tender and
before the award of a contract with a view to obtaining adjustments in price, delivery
or content (i.e. post-tender negotiations) must be the exception rather than the rule.
In particular, they must not be conducted in an EU Procedure where this might distort
competition, especially with regard to price.
14.2
If post-tender negotiations are necessary after a single-stage Tender or after the
second stage of a two-stage Tender, then such negotiations shall only be undertaken
with the tenderer who is identified as having submitted the best Tender and after all
unsuccessful Candidates have been informed. During negotiations tendered rates
and prices shall only be adjusted in respect of a corresponding adjustment in the
scope or quantity included in the Tender documents. Officers appointed by the
relevant Head of ServiceDirector to carry out post-tender negotiations should ensure
that there are recorded minutes of all negotiation meetings and that both parties
agree actions in writing.
14.3
Post-tender negotiation must only be conducted in accordance with the guidance
issued by the Solicitor who, together with the Head of Financial ServicesDirector of
Resources, must be consulted wherever it is proposed to enter into post-tender
negotiation. Negotiations must be conducted by a team of at least two Officers, one
of whom must be from a service independent to that leading the negotiations.
14.4
Where post-tender negotiation results in a fundamental change to the specification
(or contract terms) the contract must not be awarded but re-tendered.
15.
EVALUATION, AWARD OF CONTRACT, & DEBRIEFING CANDIDATES
15.1
Apart from the debriefing required or permitted by these contract procedure rules, the
confidentiality of Quotations, Tenders and the identity of Candidates must be
16 / 28
APPENDIX 6
preserved at all times and information about one Candidate’s response must not be
given to another Candidate.
15.2
Contracts must be evaluated and awarded in accordance with the Award Criteria.
During this process, Officers shall ensure that submitted Tender prices are compared
with any pre-tender estimates and that any discrepancies are examined and resolved
satisfactorily.
15.3
The arithmetic in compliant Tenders must be checked. If arithmetical errors are found
they should be notified to the tenderer, who should be requested to confirm or
withdraw their Tender. Alternatively, if the rates in the Tender, rather than the overall
price, were stated within the Tender invitation as being dominant, an amended
Tender price may be requested to accord with the rates given by the tenderer.
15.4
Officers may accept Quotations and Tenders received in respect of proposed
contracts, provided they have been sought and evaluated fully in accordance with
these contract procedure rules and, in respect of proposed contracts that are
expected to exceed £200250,000, the approval of the relevant Committee has been
secured.
15.5
For tenders up to the EU threshold it is best practice to inform all tenderers of the
intention to award and give unsuccessful tenderers an opportunity to request
feedback on their submission.
15.6
The Officer shall debrief in writing all those Candidates who submitted a bid about
the characteristics and relative advantages of the leading bidder. No information,
other than the following, should be given without taking the advice of the Solicitor:
1. How the Award Criteria were applied
2. The prices or range of prices submitted, in either case not correlated to
3. Candidates’ names
4. The names of Candidates where there were three or more Candidates.
15.7
If a Candidate requests in writing the reasons for a Contracting Decision, the Officer
must give the reasons in writing within 15 days of the request. If requested, the
Officer may also give the debriefing information at Rule 15.6 above to Candidates
who were deselected in a pre-tender Shortlisting process.
17 / 28
APPENDIX 6
SECTION 4: CONTRACT AND OTHER FORMALITIES
16.
CONTRACT DOCUMENTS
16.1
Relevant Contracts
16.1.1 All Relevant Contracts that exceed £50,000 shall be in writing.
16.1.2 All Relevant Contracts, irrespective of value, shall clearly specify:
•
what is to be supplied (i.e. the works, materials, services, matters or things to
be furnished, had or done);
•
the provisions for payment (i.e. the price to be paid and when);
•
the time, or times, within which the contract is to be performed;
•
the provisions for the council to terminate the contract.
16.1.3 The council’s order form (electronic order system) or standard terms and conditions
issued by a relevant professional body must be used wherever possible.
16.1.4 In addition, every Relevant Contract of purchase over £50.000 must also state clearly
as a minimum:
•
that the contractor may not assign or sub-contract without prior written
consent;
•
any insurance requirements;
•
health and safety requirements;
•
ombudsman requirements;
•
data protection requirements, if relevant;
•
that charter standards are to be met if relevant;
•
race relations requirements;
•
Disability Discrimination Act requirements;
•
Freedom of Information Act requirements;
•
where Agents are used to let contracts, that Agents must comply with the
council’s contract procedure rules;
•
a right of access to relevant documentation and records of the contractor for
monitoring and audit purposes if relevant.
16.1.5 The formal advice of the Solicitor must be sought for the following contracts:
•
where the Total Value exceeds EU Threshold;
•
those involving leasing arrangements;
•
where it is proposed to use a supplier's own terms;
•
those involving the purchase of application software with a Total Value of
more than £50,000;
•
those that are complex in any other way.
18 / 28
APPENDIX 6
16.2
Contract Formalities
16.2.1 Agreements (Contracts and Orders) shall be completed as follows:
Total Value Method of Completion By
Total Value
Method of Completion
By
Up to £5,000
Electronic order
Authorised buyer (see
Rule 16.2.3)
£5,001 to
£2050,000
Electronic order
Authorised Buyer
approved by Line
Manager (see Rule
16.2.3)
Above £50,001
Signature on written contract
Strategic
DirectorDirector or
Head of Paid Service
(see Rule 16.2.3)
16.2.2 All contracts must be concluded in writing or by email before the supply, service or
construction work begins.
16.2.3 The Officer responsible for securing signature of the contract must ensure that the
person signing for the other contracting party has authority to bind it.
16.2.4 All contract documents must be placed in the central repository in accordance with
Financial Regulations.
16.3 Sealing
16.3.1 Where contracts are completed by each side adding their formal seal, such contracts
shall be signed in accordance with the Council’s Standing Orders (Chief Executive or
Deputy and a Member).
16.3.2 Every council sealing will be consecutively numbered, recorded and signed by the
person witnessing the seal.
16.3.3 A contract must be sealed where:
•
the Council may wish to enforce the contract more than six years after its end;
•
the price paid or received under the contract is a nominal price and does not
reflect the value of the goods or services.
19 / 28
APPENDIX 6
17.
BONDS AND PARENT COMPANY GUARANTEES
17.1
The Officer must consult the Head of Financial ServicesDirector of Resources about
whether a Parent Company Guarantee is necessary when a Candidate is a
subsidiary of a parent company and:
•
the Total Value exceeds £250,000; or
•
award is based on evaluation of the parent company; or
•
there is some concern about the stability of the Candidate.
17.2
The Officer must consult the Head of Financial ServicesDirector of Resources
about whether a Bond is needed:
•
where the Total Value exceeds £250,000, or
•
where it is proposed to make stage or other payments in advance of receiving
the whole of the subject matter of the contract and there is concern about the
stability of the Candidate.
18.
PREVENTION OF CORRUPTION
18.1
The Officer must comply with the Code of Conduct and must not invite or accept any
gift or reward in respect of the award or performance of any contract. High standards
of conduct are obligatory. Corrupt behaviour will lead to dismissal and is a crime
under the statutes referred to in Rule 18.2 below.
18.2
The following clause must be put in every written Council contract:
“The Council may terminate this contract and recover all its loss if the Contractor, its
employees or anyone acting on the Contractor’s behalf do any of the following things:
(a)
offer, give or agree to give to anyone any inducement or reward in respect of
this or any other Council contract (even if the Contractor does not know what
has been done), or
(b)
commit an offence under the Prevention of Corruption Acts 1889 to 1916 or
Section 117(2) of the Local Government Act 1972, or
(c)
commit any fraud in connection with this or any other Council contract
whether alone or in conjunction with Council members, contractors or
employees. Any clause limiting the Contractor’s liability shall not apply to this
clause.”
19.
DECLARATION OF INTERESTS
19.1
If it comes to the knowledge of a member or an employee of the authority that a
contract in which he or she has a pecuniary interest has been or is proposed to be
entered into by the Council, he or she shall immediately give written notice to the
Chief Executive. The Chief Executive shall report such declarations to the
appropriate Committee.
20 / 28
APPENDIX 6
19.2
Such written notice is required irrespective of whether the pecuniary interest is direct
or indirect. An indirect pecuniary interest is distinct from a direct pecuniary interest in
as much as it is not a contract to which the member or employee is directly a party.
19.3
A shareholding in a body not exceeding a total nominal value of £1,000 or 1% of the
nominal value of the issued share capital (whichever is the less) is not a pecuniary
interest for the purposes of this standing order.
19.4
The Chief ExecutiveMonitoring Officer shall maintain a record of all declarations of
interests notified by members and Officers.
19.5
The Chief Executive shall ensure that the attention of all members is drawn to the
National Code of Local Government Conduct.
SECTION 5: CONTRACT MANAGEMENT
20.
MANAGING CONTRACTS
20.1
Heads of ServiceDirectors in sponsoring departments are to name contract
managers for all new contracts. All contracts must have a named council contract
manager for the entirety of the contract.
20.2
Contract Managers must follow the procedures set out in the council’s Purchasing
Guidance.
21. RISK ASSESSMENT AND CONTINGENCY PLANNING
21.1
A business case must be prepared for all procurements with a potential value over
the EU Threshold. Provision for resources for the management of the contract, for its
entirety, must be identified in the business case.
21.2
For all contracts with a value of over £7550,000, contract managers must:
•
maintain a risk register during the contract period;
•
undertake appropriate risk assessments and for identified risks;
•
ensure contingency measures are in place.
22.
CONTRACT MONITORING, EVALUATION AND REVIEW
22.1
All contracts which have a value higher than the EU Threshold limits, or which are
High Risk, are to be subject to monthly formal review with the contractor. The review
may be conducted quarterly if permitted by the Head of Organisational
DevelopmentDirector of Resources.
22.2
For all contracts with a value higher than the EU Threshold limits, or which are High
Risk, an annual report must be submitted to the relevant Committee.
22.3
The Council’s approved project management methodology must be applied to all
contracts deemed to be High Risk, High Value, or High Profile.
21 / 28
APPENDIX 6
22.4
During the life of the contract, the Officer must monitor in respect of:
•
performance;
•
compliance with specification and contract cost;
•
any Value for Money requirements;
•
user satisfaction and risk management.
22.5
Where the Total Value of the contract exceeds £250,000, the Officer must make a
written report to the relevant Committee evaluating the extent to which the
purchasing need and the contract objectives (as determined in accordance with Rule
5.2) were met by the contract. This should be done normally when the contract is
completed. Where the contract is to be re-let, a provisional report should also be
available early enough to inform the approach to re-letting of the subsequent
contract.
22 / 28
APPENDIX 6
DEFINITIONS APPENDIX
Agent
A person or organisation acting on behalf of the council or on
behalf of another organisation.
Approved Buyer
Officer Designated by a Head of ServiceDirector who is
authorised to generate electronic orders on behalf of the
Council.
Approved List
A list drawn up in accordance with Rule 7.2.
Award Criteria
The criteria by which the successful Quotation or Tender is to
be selected (see further Rules 10 and 11.2e).
Award Procedure
The procedure for awarding a contract as specified in Rules 8,
10 and 15.
Best Value
The duty, which Part I of the Local Government Act 1999
places on local authorities, to secure continuous improvement
in the way in which functions are exercised, having regard to a
combination of economy, efficiency and effectiveness as
implemented by the council. This terminology has now in
many instances been superseded by Value for Money.
Bond
An insurance policy: if the contractor does not do what it has
promised under a contract with the council, the council can
claim from the insurer the sum of money specified in the bond
(often 10% of the contract value). A bond is intended to
protect the council against a level of cost arising from the
contractor’s failure.
Candidate
Any person who asks or is invited to submit a Quotation or
Tender.
Chief Executive
The Council’s Head of Paid Service has defined in the
Constitution.
Chief Finance
Officer
The Officer Designated Chief Finance Officer (Section 151
Officer) by the Council.
Code of Conduct
The code regulating conduct of Officers issued by the Chief
Executive.
Committee
A Committee which has power to make decisions for the
Council, for example a joint Committee with another local
authority, but not the scrutiny Committee.
Commissioning &
Procurement
Strategy
The document setting out the council’s approach to
commissioning and procurement, setting out key priorities for
the next few years.
Constitution
The constitutional document approved by the council which:
•
allocates powers and responsibility within the council and
between it and others;
•
delegates authority to act to the Committees, and
23 / 28
APPENDIX 6
Officers;
•
regulates the behaviour of individuals and groups through
rules of procedure, codes and protocols.
Consultant
Someone employed for a specific length of time to work to a
defined project brief with clear outcomes to be delivered, who
brings specialist skills or knowledge to the role, and where the
council has no ready access to employees with the skills,
experience or capacity to undertake the work.
Contracting
Decision
Any of the following decisions:
•
composition of Approved Lists;
•
withdrawal of Invitation to Tender;
•
whom to invite to submit a Quotation or Tender;
•
Shortlisting;
•
award of contract;
•
any decision to terminate a contract.
Corporate
Contract
A contract let by the Council to support the council’s aim of
achieving Value for Money.
Director
One of three Directors responsible for operational delivery of
services and designated as such in the constitution
Director of
Resources
Director responsible for financial and procurement activities
and internal audit
Essex
Procurement Hub
The council’s central procurement partner charged with
providing strategic direction and advice to secure Value for
Money in the Council’s procurement activities. The hub also
has EU regulations legal expertise.
EU Procedure
The procedure required by the EU where the Total Value
exceeds the EU Threshold.
EU Threshold
The contract value at which the EU public procurement
directives apply.
European
Economic Area
The 15 27 of the 28 members of the European Union, and
Norway, Iceland and Liechtenstein.
Financial Officer
The most senior Officer representing the Head of Financial
ServicesDirector of Resources or designated by him/her to
provide financial advice to the Head of ServiceDirector.
Financial
Regulations and
procedures
The financial regulations and procedures outlining Officer
responsibilities for financial matters issued by the Chief
Finance Officer in accordance with the Constitution.
24 / 28
APPENDIX 6
Financial Services
The service of the Council that includes responsibility for
discharging the Council’s procurement responsibilities
Framework
Agreement
An agreement between one or more authorities and one or
more economic operators, the purpose of which is to establish
the terms governing contracts to be awarded during a given
period, in particular with regard to price and, where
appropriate, the quantity envisaged.
Government
Procurement
Agreement
The successor agreement to the General Agreement on Trade
and Tariffs. The main signatories other than those in the
European Economic Area are the USA, Canada, Japan,
Israel, South Korea, Switzerland, Norway, Aruba, Hong Kong,
China, Liechtenstein and Singapore.
Head of Service
One of seven Heads of Service responsible for operational
delivery of services and designated as such in the constitution
Head of Customer
and Democratic
Services
The Officer responsible for overseeing the Tender procedures.
Head of Financial
Services
Head of Service responsible for financial and procurement
activities
Head of
Organisational
Development
Head of Service responsible for Internal Audit.
Head of Paid
Service
The Council’s Chief Executive.
High Profile
A high-profile purchase is one that could have an impact on
functions integral to council service delivery should it fail or go
wrong.
High Risk
A high-risk purchase is one which presents the potential for
substantial exposure on the council’s part should it fail or go
wrong.
High Value
A high-value purchase is where the value exceeds the EU
Threshold values.
Invitation to
Tender
Invitation to tender documents in the form required by these
contract procedure rules.
Key Decision
Decisions that are defined as key decisions in the
Constitution.
Line Manager
The Officer’s immediate superior or the Officer designated by
the Head of Service to exercise the role reserved to the line
manager by these contract procedure rules.An Officer
designated by a Director to exercise the role reserved to the
Line Manager by the contract procedure rules, this will be a
Level 2 Manager (i.e. managers that report directly to a
Director).
25 / 28
APPENDIX 6
Members
Persons currently elected to serve on the Council
Monitoring Officer
The Officer defined as such in the Constitution
Nominated
Suppliers and
Sub-contractors
Those persons specified in a main contract for the discharge
of any part of that contract.
Non-commercial
Considerations
a)
The terms and conditions of employment by contractors
of their workers or the composition of, the arrangements
for the promotion, transfer or training of or the other
opportunities afforded to, their workforces (‘workforce
matters’).
b)
Whether the terms on which contractors contract with
their sub-contractors constitute, in the case of contracts
with individuals, contracts for the provision by them as
self-employed persons of their services only.
c)
Any involvement of the business activities or interests of
contractors with irrelevant fields of government policy.
d)
The conduct of contractors or workers in industrial
disputes between them or any involvement of the
business activities of contractors in industrial disputes
between other persons (‘industrial disputes’).
e)
The country or territory of origin of supplies to, or the
location in any country or territory of the business
activities or interests of, contractors.
f)
Any political, industrial or sectarian affiliations or interests
of contractors or their directors, partners or employees.
g)
Financial support or lack of financial support by
contractors for any institution to or from which the
authority gives or withholds support.
h)
Use or non-use by contractors of technical or
professional services provided by the authority under the
Building Act 1984 or the Building (Scotland) Act 1959.
Workforce matters and industrial disputes, as defined in
paragraphs (a) and (d), cease to be non-commercial
considerations to the extent necessary or expedient to
comply with Best Value; or where there is a transfer of
staff to which the Transfer of undertakings. (Protection of
Employment) Regulations 1981 (TUPE) may apply.
Officer
The Officer designated by the Head of ServiceDirector to deal
with the contract in question.
Parent Company
Guarantee
A contract which binds the parent of a subsidiary company as
follows:
•
if the subsidiary company fails to do what it has
promised under a contract with the council, the council
can require the parent company to do so instead.
26 / 28
APPENDIX 6
Priority Services
Those services required to be tendered as defined in the EU
public procurement directives.
Procurement
Strategy
The document setting out the council’s approach to
procurement and key priorities for the next few years.
Project
Management
Methodology
The process set up by the Council to ensure that a project is
executed in a disciplined and structured manor
Purchasing
Guidance
The suite of guidance documents, together with a number of
standard documents and forms, which supports the
implementation of these Contract Procedure Rules. The
guidance is available on the council’s intranet.
Quotation
A quotation of price and any other relevant matter (without the
formal issue of an Invitation to Tender).
Relevant Contract
Contracts to which these contract procedure rules apply (see
Rule 4).
Resources
Directorate
The directorate of the Council that includes responsibility for
discharging the Council’s procurement responsibilities
Service
The services provided by the Council are currently broken
down into nine areasthree directorates, each under the
responsibility of a Head of ServiceDirector.
Short-listing
The process of selecting Candidates who are to be invited to
quote or bid or to proceed to final evaluation.
Solicitor
Any Solicitor designated by the Council’s Chief Executive or
the Head of the Council’s contracted Legal Services
PartnershipMonitoring Officer.
Standing Orders
Part of the Council’s Constitution specifying rules for how
business shall be conducted.
Strategic Director
The officer defined as such in the Constitution.
Supervising
Officer
The Line Manager’s immediate superior.
Tender
A Candidate’s proposal submitted in response to an Invitation
to Tender.
Tender Record
Log
The log kept by the Head of Customer and Democratic
ServicesDirector of Resources to record details of Tenders
(see Rule 13.5).
Total Value
The whole of the value or estimated value (in money or
equivalent value) for a single purchase or disposal calculated
27 / 28
APPENDIX 6
as follows:
(a) where the contract is for a fixed period, by taking the total
price to be paid or which might be paid during the whole
of the period.
(b) where the purchase involves recurrent transactions for
the same type of item, by aggregating the value of those
transactions in the coming 12 months.
(c) where the contract is for an uncertain duration, by
multiplying the monthly payment by 48.
(d) for feasibility studies, the value of the scheme or
contracts which may be awarded as a result.
(e) for Nominated Suppliers and Sub-contractors, the total
value shall be the value of that part of the main contract
to be fulfilled by the Nominated Supplier or Subcontractor.
TUPE
(Transfer of
Undertakings
(Protection of
Employment)
Regulations 2006)
(SI 2006 No.246)
Value for Money
Subject to certain conditions, these regulations apply where
responsibility for the delivery of works or services for the
authority is transferred from one organisation (e.g. private
contractor, local authority in-house team) to another (e.g.
following a contracting out or competitive tendering process)
and where the individuals involved in carrying out the work are
transferred to the new employer. These regulations seek to
protect the rights of employees in such transfers, enabling
them to enjoy the same terms and conditions, with continuity
of employment, as existed with their former employer.
Broadly, TUPE regulations ensure that the rights of employees
are transferred along with the business.
Value for money is not the lowest possible price; it combines
goods or services that fully meet your needs, with the level of
quality required, delivery at the time you need it, and at an
appropriate price.
28 / 28

15 MINUTES of FINANCE AND CORPORATE

Transcription

Similar documents

Nesting Structure Design by Toronto Region Conservation Authority

P15/S1546/FUL - 1 Coopers Close, Littleworth

Appendices 20/09/10 - Matlock Town Council

92-03-006_G4 AndThenItHappened_VC_WN.indd

A Healthy Start - The Global Goals

Appendix B to The Ascetical Homilies of Saint Isaac the Syrian

Netter`s Surgical Anatomy Review P.R.N.

MIL-STD-31000A

A Guide to the Application of the ANZECC/ARMCANZ

Clean Water For All